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2007 DIGILAW 3030 (ALL)

JAGDISH GLASS WORKS v. COMMISSIONER OF TRADE TAX.

2007-12-17

BHARATI SAPRU

body2007
JUDGMENT MS. BHARATI SAPRU, J. - Heard learned counsel for the revisionist Sri Krishna Agrawal and Sri Namai Das learned standing counsel for the State. The revision has been filed by the assessee under section 11 of the U.P. Trade Tax Act, 1948 against the order of the Tribunal dated June 4, 1999. By the impugned order, the Tribunal has sustained the penalty imposed upon the assessee under section 4B(5) of the Act, for having contravened the terms of the eligibility certificate on account of the fact that they sold soda ash in contravention of the terms of the recognition certificate. The questions of law referred are hereinbelow : "(i) Whether on the facts and circumstances of the case, the order of the Tribunal is legally correct and justified in confirming the penalty under section 4B(5) on the facts and circumstances of the case ? (ii) Whether the Tribunal is legally correct in confirming the penalty at Rs. 67,608.36 ? (iii) Whether the levy of penalty at Rs. 67,608.36 is based on relevant consideration and is legally justified ?" The facts of the case are that the assessee was a manufacturer of glass goods and holding recognition certificate under section 4B for the purposes of purchasing raw materials at concessional rate for use in the manufacturing of glass goods. Soda ash is one of the raw materials which the assessee was purchasing on the issue of form 3B at concessional rate. It is the case of the assessee that soda ash is the goods, which get affected by moisture, therefore suffered damages. When there is atmospheric moisture, thus damaged soda ash is not usable as raw material in the manufacture of glass goods and therefore the assessee had no option but to sell damaged soda ash to parties who could use this damaged soda ash in the manufacture of sodium silicate. For the relevant year of the assessment which is 1990-91, the assessee purchased 473.82 metric tons of soda ash. According to the assessee, it had sold 299.200 metric tons of damaged soda ash and paid tax on the sale of such damaged soda ash to the extent of Rs. 73,392. For the relevant year of the assessment which is 1990-91, the assessee purchased 473.82 metric tons of soda ash. According to the assessee, it had sold 299.200 metric tons of damaged soda ash and paid tax on the sale of such damaged soda ash to the extent of Rs. 73,392. Penalty proceedings were initiated against the assessee under section 4B(5) for having sold 299.200 metric tons on ground that they had not used soda ash for the manufacture of glass goods but had violated the provisions of section 4B(5) of the Act. Aggrieved by the order by the assessing authority, the assessee filed first appeal, which was dismissed by the first appellate authority and thereafter the assessee moved second appeal under section 10 of the Act, which too had been dismissed by the Tribunal. Having heard learned counsel for the revisionist Sri Krishna Agrawal at length and learned Standing Counsel Sri Namai Das and having perused the record. The contention of the assessee is that the assessee sold 299.200 metric tons of the damaged soda ash. The arguments of the learned counsel for the assessee is that shape in which the assessee sold soda ash was damaged soda ash and therefore the goods were not the same as what the goods were when they were purchased and therefore there was no violation of the provisions of section 4B and penalty could not have been imposed under section 4B(5). Learned Standing Counsel has argued that the assessee was unable to establish by way of evidence before the authorities below that what they sold, was actually damaged soda ash. Learned Standing Counsel has argued that the assessee had not even informed the department that a part of soda ash which they had purchased in the relevant year had been damaged and even otherwise there was no evidence before the authorities below to come to the conclusion that soda ash was damaged. He therefore argued that in the absence of there being any evidence at all that soda ash was damaged goods, the conclusion drawn by the Tribunal that the assessee had sold soda ash and not the damaged soda ash, was correct and therefore the imposition of penalty was also justified. In view of the above, I am of the opinion that the submissions made by the learned Standing Counsel have substance and are liable to be accepted. In view of the above, I am of the opinion that the submissions made by the learned Standing Counsel have substance and are liable to be accepted. There is indeed no iota of evidence to either suggest or establish that 299.200 metric tons of soda ash, which was sold by the assessee, was in damaged condition. This factum have been clearly recorded by the Tribunal also. In absence of the fact being established that goods sold, were damaged soda ash, the conclusion of the Tribunal is correct. There was clear violation of the provisions of section 4B(5) of the Act and the imposition of penalty under section 4B(5) of the Act is fully justified. As such the impugned order passed by the Tribunal is upheld by this court. The questions referred are answered thus against the assessee and in favour of the Revenue. The revision is dismissed. There will be no order as to costs.