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2006 DIGILAW 1028 (ALL)

R. S. Metal Products v. Commissioner of Trade Tax

2006-04-17

ARUN TANDON

body2006
ARUN TANDON, J. ( 1 ) ASSESSEE alleges non-compliance of Rule 41 (8) Proviso 2 of the U. P. Trade Tax Rules. ( 2 ) THE facts relevant for the purposes of the present revision are: ( 3 ) IN assessment proceedings of the year year 1987-88, 30. 3. 1993 was fixed as the date for appearance of the assessee before the authority. On the relevant date neither the assessee appeared nor he made any application for adjournment. ( 4 ) THE Assessing Authority, therefore, proceeded to pass ex-parte order against the assessee dated 30. 3. 932. For the reasons recorded in the order dated 30. 3. 1992 the Trade Tax Officer rejected the account books of the petitioner and thereafter proceeded on the same date to determine the turn over on the basis of best judgement assessment. ( 5 ) FEELING aggrieved by the said order of the Assessing Authority petitioner preferred an Appeal under Section 8 of the Trade Tax Act which was numbered as Appeal No. 398 of 1993, in the appeal amongst other it was contended that even if the petitioner was absent on the date fixed i. e. 30. 3. 1992 and that the Assessing Authority had Termed an opinion that the account books of the petitioner were to be rejected, he was under further legal obligation to have issued a notice to the assessee as contemplated by Rule 41 (8) Proviso 2 of the Trade Tax Rules disclosing the reasons for non acceptance of the sale or purchase or both as disclosed by the assessee in his returns and to afford an opportunity to the assesses to furnish his explanation. ( 6 ) THE aforesaid contention raised on behalf of the assessee has been rejected by the First appellate Authority by means of the order dated 24. 3. 1994 on recording a finding that the assessee has not furnished any information along with memo of appeal or in the application filed under Section 22 with regards to the difference in taxable turnable as noticed the order of assessing authority. The Second Appeal filed by the assessee has met with the same fate. Hence the present Revision. ( 7 ) UNDER order of this Court dated 1. 8. 2005 original assessment records were called for by the court. Standing Counsel has made a statement that original assessment records are not traceable. The Second Appeal filed by the assessee has met with the same fate. Hence the present Revision. ( 7 ) UNDER order of this Court dated 1. 8. 2005 original assessment records were called for by the court. Standing Counsel has made a statement that original assessment records are not traceable. In such circumstances the material on record of the present revision is being treated as the basis for decision of the present trade tax revision. ( 8 ) RULE 41 (8) Proviso 2 of the U. P. Trade Tax Rules reads as follows: (8) (2) Provided further that, before determining the turnover of the dealer to the best of his judgment, the assessing authority shall cause a notice to be served on the dealer, stating the reasons, for non-acceptance of the turnover of sales or purchases or both, as disclosed in the returns, if any, submitted by him and shall given him a reasonable opportunity of furnishing his reply thereto. ( 9 ) FROM the language of the aforesaid rules it is apparently clear that the aforesaid rule is mandatory and non-compliance thereof would vitiate the order. This Court in its judgments reported in the case of H. S. R. Bhatia v. Commissioner of Sales tax U. P. reported in 1998 U. P. T. C. page 967, Munshi Singh v. Commissioner of Trade Tax 1998 page 942 has taken a similar view. ( 10 ) IN view of the aforesaid settled legal position Rule 14 (8) Proviso 2 having been held mandatory, it was but necessary for the Assessing Authority to have issued a notice, after rejecting the account books submitted by the petitioner stating the reasons for non acceptance of sales or purchase or both as disclosed in the returns. From the records of the present revision it is apparently clear that such a procedure has not been adopted. After rejection of the account books of the petitioner the assessing authority proceeded to determine the taxable turn over on the basis of best judgment assessment on the same date without compiling with the mandatory requirements of Rule 41 (8) Proviso 2. ( 11 ) THE First Appellate Authority as well as the Trade Tax Tribunal have failed to appreciate the aforesaid aspect of the matter while dismissing the first Appeal and the Second Appeal filed by the Assessee respectively. ( 11 ) THE First Appellate Authority as well as the Trade Tax Tribunal have failed to appreciate the aforesaid aspect of the matter while dismissing the first Appeal and the Second Appeal filed by the Assessee respectively. ( 12 ) IN view of the aforesaid conclusion the order passed by the Assessing Authority as well as the First Appellate Authority and the Trade Tax Tribunal cannot be legally sustained and are hereby quashed. The matter is remanded to the Assessing Authority to determine the taxable turn over of the assessee on the basis of best judgment assessment, as well as the liability towards tax, afresh after complying with the provisions of Rule 41 (8) Proviso 2 of the aforesaid rules. The aforesaid exercise must be completed within six months from the date a certified copy of this order is filed before the authority. Petitioner undertakes to submit a copy of this order within two weeks from today before the Assessing Authority. . .