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ALLAHABAD HIGH COURT
Arun Tandon, J.
Sangam Lal Sonar
Versus
Commissioner of Sales Tax
Sales Tax Revision 1449 of 1990
Decided On : 17 April 2006
Sales Tax Revision 1449 Of 1990
Trade Tax - Assessment of Tax Liability - U.P. Trade Tax Act - Section 9, Section 10 - [Section 9, Section 10] - The court quashed the orders of the Assessing Authority, First Appellate Authority, and Trade Tax Tribunal, and remanded the matter to the Assessing Authority for decision afresh, emphasizing the need for strict compliance with the directions issued by the First Appellate Authority and the procedures provided under the U.P. Trade Tax Act and Rules.
Fact of the Case:
The petitioner's tax liability was fixed at Rs. 6 lakhs, and the tax liability was determined at Rs. 12,0007 under the order of the Assessing Authority. The petitioner appealed under Section 9 of the U.P. Trade Tax Act, and the matter was remanded to the Assessing Authority. The Assessing Authority proceeded to determine the turnover and tax liability based on a statement made by a partner of a third party firm, recorded behind the back of the assessee. The petitioner's subsequent appeals were rejected, leading to the present revision.
Finding of the Court:
The court found that the Assessing Authority failed to enforce the attendance of the partner/manager of the third party firm as directed by the First Appellate Authority, and the subsequent orders of the First Appellate Authority and the Trade Tax Tribunal also failed to consider this aspect. As a result, all three orders were quashed, and the matter was remanded to the Assessing Authority for a fresh decision, emphasizing strict compliance with the directions and procedures provided under the U.P. Trade Tax Act and Rules.
Issues: The issues revolved around the enforcement of the directions issued by the First Appellate Authority for examining the partner/manager of the third party firm and the failure of the Assessing Authority, First Appellate Authority, and Trade Tax Tribunal to ensure compliance with the procedures provided under the U.P. Trade Tax Act and Rules.
Ratio Decidendi: The court emphasized the need for strict compliance with the directions issued by the higher authority and the procedures provided under the U.P. Trade Tax Act and Rules. It held that mere part compliance is not sufficient and that all procedures prescribed by law must be adopted for ensuring the attendance of relevant parties.
Final Decision: The court quashed the previous orders and remanded the matter to the Assessing Authority for a fresh decision, with a directive to complete the proceedings on remand within six months, emphasizing strict compliance with the directions and procedures provided under the U.P. Trade Tax Act and Rules.
( 1 ) IN respect of the Assessment Year 1975-76 on the basis of certain documents recovered from m/s. Kaka Saheb Nana Saheb, (a third party) as well as on other material taxable turn over of the petitioner was fixed at Rs. 6 lakhs while tax liability of the petitioner was determined at Rs. 12,0007- under order of the Assessing Authority dated 30. 1. 1980.
( 2 ) FEELING aggrieved by the said order the assessee preferred an Appeal under Section 9 of the u. P. Trade Tax Act. The Appeal was allowed under the order of the Assistant Commissioner (Judicial) dated 28. 4. 1983 and the matter was remanded to the Assessing Authority with the following directions: is Sambandh Mein Bikrikar Adhikari Ko Chahiye Tha Ki Kaka Saheb Nana Saheb Nanak firm Se Pooch Tachh Karke Yah Nishit Karte Ki Chandi Ke Is Indraj Vastav Mein Kis vyakti Se Sambandhit The. Kar Nirdharan Patravali Ke Avlokan Se Spasht Hota Hal Ki aisi Koi Pooch Tachh Nahin Ki Gavi. Atah Nyay Ki Drishti Se Yah Uchit Hoga Ki Case punah Bikrikar Adhikari Ko Remand Kiva Jaye. Kar Nirdharan Adhikari Ne Kaka Saheb nana Sahed Namak Firm Se Pratinidhi Ko Bulakar Is Indraj Ke Sambandh Mein Pooch tachh Karen Tatha Yah Nishchit Mat Vyakt Karen Ki Yah Indraj Kis Vyakti Se sambandhit Hal. Yadi Pooch Tachh Ke Bad Yah Paya Jaye Ki Indraj Appealkarta Se Hi sambandhit Hal To Punah Niyamanusar Kar Nirdharan Sampann Karen. Aadesh appeal Swikar Ki Jati Hai Tatha Case Bikrikar Adhikari Ko Uprokt Nirdeshon Ka avlokan Karne Ke Baad Punah Nistaran Hetu Prati Preshit Kiya Jata Hal.
( 3 ) THE Assessing Authority thereafter issued notices to the partner of the firm M/s. Kaka Saheb nana Saheb. It appears that the partner of the said firm did not respond to the notices so issued and, therefore, the Assessing Authority proceeded to determine the turn over as well as the tax liability of the petitioner on the basis of the statement made by the partner earlier before the trade Tax Officer which was admittedly recorded behind the back of the assessee.
( 4 ) FEELING aggrieved by the order passed by the Assessing Authority dated 25. 2. 1984, petitioner preferred an Appeal under Section 9 of the Trade Tax Act which was numbered as Appeal No. 302 of 1984. Amongst other it was contended on behalf of the petitioner that the order of remand of the First Appellate Authority dated 24. 8. 1983 has not been carried out by the Assessing authority in letter and spirit, mere service of the notice upon the partner of the firm Kaka Saheb nana Saheb, the partners having not responded to the said notices cannot be held to sufficient compliance of the order of remand in the facts of the case inasmuch as the Assessing Authority has not chosen to enforce their attendance as per the powers conferred under Rule 75 of the U. P. Trade Tax Act. The First Appellate Authority rejected the contention so raised on behalf of the petitioner with a finding that the partner of the firm M/s. Kaka Saheb Nana Saheb to whom notice has been served had not responded and, therefore, adverse inference has rightly been drawn against assessee.
( 5 ) THE Second Appeal preferred by the petitioner under Section 10 of the Trade Tax Act, met with the same fate under the order of the Trade Tax Tribunal dated 13. 8. 1990. Hence the present revision.
( 6 ) FROM the order of remand passed by the First Appellate Authority dated 24. 8. 1983 it is apparently clear that specific directions were issued for examining the partner/manager of the firm Kaka Saheb Nana Saheb and for confirming as to whether the statement made by the them in respect of melting of the silver having been done for the petitioner. Thereafter further proceedings, were to be taken accordingly.
( 7 ) IN the opinion of the Court mere service of notice upon the partner of the firm and their refusal to participate in the proceedings cannot be held to be sufficient compliance of the order of remand. The Authority should have taken recourse to all such legal provisions for enforcing the at
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