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COURT NO.33
Commercial Tax Revision No. 747 Of 2009
Bir Brothers...........................................................................Applicant
Versus
Commissioner of Commercial Tax,U.P., Lucknow........Respondents.
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Hon'ble Bharati Sapru,J.
This revision has been filed under Section 11 of the U.P. Trade
Tax Act read with Sections 81 and 58 of the VAT Act, 2008 for the
assessment year 1995-96 against the order of the Tribunal dated
14.5.2009. By this order the Tribunal has refused to grant to the
assessee a refund under Section 29-A of the U.P. Trade Tax Act and
in fact has ordered for recovery.
The questions of law referred to are hereunder:
“1. Whether, the finding of the Tribunal that the applicant
had realized tax @ 10% on sale of axle is perverse and or
based on presumption and conjectures ?
2. Whether, bifurcation of the total sale receipts in the
return, into turnover and tax can lead to the inference of tax
having been passed on and whether it can defeat the claim of
refund under Section 29-A of the Act ?”
The assessee is engaged in the purchase and sale of tractor
parts, machinery parts and axle parts. On 15.12.1997 an assessment
was made for the applicant and its turnover was accepted at
Rs.21,26,905/- on iron and steel. The assessee was assessed @ 4%
and the tax liability of axle was deposited @ 10%. Thus, it is the
contention of the assessee, that it was wrongly calculated as under
the provisions of Section 14 of the Central Sales Tax Act it was only
liable to pay tax @ 4% on axle. The assessee, therefore, contended
that it had paid the tax on axle in excess and sought a refund under
Section 29-A of the Act.
The assessing authority rejected the prayer for refund by its
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order dated 15.12.1997. By its order dated 30.6.1998 the 1st
Appellate Authority allowed the appeal filed by the applicant and
directed the department to refund Rs.1,08,369/- in favour of the
assessee. In the order dated 30.11.1998 it has been recorded by the
1st Appellate Authority that the assessee who was a registered dealer
had not realized any tax from its purchaser separately and also
recorded that the assessee had not made any violation of the
provisions of Section 8A(2) of the Act and directed the refund of the
amount deposited in excess.
The assessee has placed on the record as Annexure 3 to the
revision, the bills in respect of sale of axle, these very bills had been
produced before the 1st Appellate Authority also. The bills record
“rate inclusive of local taxes and other additional taxes”.
Aggrieved by the order of the 1st Appellate Authority
regarding a finding that no tax has been realized separately from the
purchase of axle, the department filed an appeal, being Appeal No.51
of 1999, before the Trade Tax Tribunal. The Tribunal has, however,
reached a completely different conclusion and has set aside the order
of refund while confirming the order of the assessing authority.
The reason adopted by the Tribunal is that the assessee himself
while praying for refund has bifurcated its turnover and the
difference is of 10% which is indicative of the fact that this 10% was
the amount realized by the assessee from its purchaser.
The learned counsel for the assessee has strenuously argued
that even though the assessee may have bifurcated the the amount
that itself was not indicative of the fact that this 10% had been
separately charged.
He has argued that the bills of contract was made with the
purchaser on the other hand did not show any separate amount and
therefore, this was indicative of the fact that no separate amount had
been charged and in fact the total amount disclosed by the assessee
of a sum of Rs.21,26,905.75 for the sale of axle was in fact
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aggregate and the bills being given by him were of a composite
nature and therefore, the entire amount of Rs.21,26,905.75 would
constitute his turnover within the meaning of Section 2(i) and
therefore, this would be the amount chargeable to tax under the
statute. The learned standing counsel has argued that since the
assessee had himself bifurcated the amount and difference was
coming to 10% was sufficient for the department to calculate that
10% had been charged as tax from the purchaser of axle.
I have heard the learned counsel for the assessee at length and
have perused the material on the record.
The 1st Appellate Authority has clearly recorded a finding that
the amount of tax was separately charged by the assessee in the bills.
This fact is also reflected as true from the bills which have been
placed on the record. No doubt the assessee bifurcated the amount,
but, I am not inclined to agree with the submission made by the
learned counsel for the assessee that in the facts and the
circumstances of the case the total amount of Rs.21,26,905.75 was
the turnover of the assessee within the meaning of Section 2(i) of the
Act and, therefore, this was the amount which was chargeable to tax.
The tax to be charged on axle was 4%. This is not denied either by
the State or by the assessee.
The learned counsel for the assessee has also pointed out that
the assessing authority while making its assessment has also assessed
the turnover of the assessee at Rs.21,26,905.75 in respect of the axle.
The learned counsel for the assessee had also relied on a
decision of this Court in the case of Shiv Shakti Soap Industries,
Ghaziabad vs. Commissioner, Trade Tax, U.P., Lucknow, 2007
NTN (33)285, wherein also this Court came to the conclusion that
where an assessee had made a bifurcation in the turnover that had
been charged in a consolidated way. It would not be conclusive of
the fact that any amount had been actually realised from the
purchaser.
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Thus, as the finding has already been recorded by the 1st
Appellate Authority that the assessee had not realised the tax
separately from its purchaser, the bifurcation made by the assessee is
not indicative of any specific amount being realised from the
purchaser. This Court, therefore, comes to the conclusion that the 1st
Appellate Authority had rightly assessed the turnover of the assessee
at a sum of Rs.21,26,905.75 and the assessee would be liable to pay
tax @ 4% on that amount. In case the assessee had deposited any
amount in excess of 4% on the said amount, the same shall be
refunded to the assessee after making due calculations. The
calculations and verifications shall be made within a period of three
months from the date of the production of a certified copy of this
order being placed before the authority concerned.
In case the amount refunded is in excess, then it is open to the
department to recover it from the assessee.
This revision is disposed of.
Dated:28.1.2010
AKJ