Allahabad High Court
M/S RAMNATH SANJAY KUMAR THRU ITS PROP. RAM NATHversusTHE COMMISSIONER COMMERCIAL TAX U.P. LUCKNOW
- Decided
- Bench
- PIYUSH AGRAWAL
Holding
The Tribunal was justified in restoring the assessment order because the material stock discrepancies discovered justified rejection of the books of account and the enhancement of tax, and the Tribunal complied with the procedural requirements of Rule 63.
Summary
M/S Ramnath Sanjay Kumar (the assessee) challenged a best‑judgment assessment made by the Commercial Tax authority after a Special Investigation Branch survey on 12‑09‑2012 revealed large stock discrepancies. The assessing authority rejected the assessee’s books of account and enhanced the taxable turnover, which was partially reduced by the First Appellate Authority on 22‑09‑2016. Both the assessee and the revenue filed second appeals before the Commercial Tax Tribunal, which dismissed the assessee’s appeal, restored the original assessment order and upheld the revenue’s appeal, imposing an additional tax of Rs 9,67,500. The assessee contended that the Tribunal failed to comply with the mandatory provisions of Sub‑Rule 63 of the U.P. VAT Rules, 2008 and did not provide reasons for the inflated turnover figures. The High Court held that the Tribunal was justified in its decision because the substantial stock discrepancies substantiated the rejection of the books and the enhancement, and the procedural requirements under Rule 63 were not violated. Consequently, the revision petition was dismissed.
Issues considered
- Whether the Commercial Tax Tribunal was legally justified in restoring the assessment order dated 26‑07‑2013 without adhering to the mandatory provisions of Sub‑Rule 63 of the U.P. VAT Rules, 2008 as interpreted in Money Honey Electronics v. Commissioner (2012 UPTC 1145) and Executive Engineer Electrical Store v. C.C.T. (2014 UPTC 1238).
- Whether the Tribunal was justified in restoring the best‑judgment assessment and imposing an additional tax liability of Rs 9,67,500 without assigning specific reasons or a basis for the determined turnover.
Legislation cited
- Uttar Pradesh Value Added Tax Rules, 2008 — s. Rule 63
Subjects
- Commercial Tax
- Best Judgment Assessment
- U.P. VAT Rules
- Rule 63
- Stock Discrepancy
- Revision Petition
- Tribunal Decision
Judgment
Reserved
HIGH COURT OF JUDICATURE AT ALLAHABAD
SALES/TRADE TAX REVISION No. - 3 of 2018
M/S Ramnath Sanjay Kumar Thru Its Prop. Ram
Nath .....Revisionist(s)
Versus
The Commissioner Commercial Tax U.P. Lucknow
.....Opposite
Party(s)
Counsel for Revisionist(s) : Lokesh Mittal, Murari Mohan Rai
Counsel for Opposite Party(s) : C.S.C.
Court No. - 7
HON'BLE PIYUSH AGRAWAL, J.
1. Heard learned counsel for the parties.
2. The present revision has been filed against the order dated 07.10.2017
passed by Commissioner Tax Tribunal, Muzaffar Nagar in Second Appeal
No. 642 of 2016 for Assessment Year 2012-13. The revision was
admitted by this Court vide order dated 09.01.2018 on the following
questions of law:
"(A) Whether, on the facts and in the circumstances of the case, the
Commercial Tax Tribunal was legally justified in restoring the
assessment order dated 26.07.2013 in deciding the cross appeal filed by
the applicant and the revenue without adhering to the mandatory
provisions contained in Sub Rules of Rule 63 of the U.P. VAT Rules 2008
as laid down by this Hon'ble Court in the cases of Money Honey
Electornics Vs. Commissioner, Commercial Tax 2012 UPTC 1145 and
Executive Engineer Electrical Store Vs. C.C.T. 2014 UPTC 1238?
(B) Whether, on the facts and in the circumstances of the case, the
Commercial Tax Tribunal was legally justified in restoring the best
judgment assessment order passed by the assessing authority on
26.07.2013 by which the evaded turnover of purchase and sales
determined at Rs.1,14,50,000/- and Rs.1,25,00,000/- and creating on
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2
additional tax liability of Rs.9,67,500/- without assigning any reason and
basis for arriving at such an excessive and arbitrary turnover of purchase
and sales?"
3. Learned counsel for the revisionist submits that on 12.09.2012, a team
of Special Investigation Branch, Commercial Tax, Muzzafar Nagar made
a survey at the business premises of the revisionist wherein a difference in
stocks of various items was alleged to have been found. Thereafter while
framing the assessment order, the assessing authority passed an
assessment order dated 26.07.2013 rejecting the books of account and
enhanced the taxable turnover, against which the first appeal was filed
which was partly allowed and the taxable turnover was reduced by order
dated 22.09.2016. The cross appeals were filed by both the revisionist and
the revenue. By the impugned order, the Tribunal dismissed the appeal of
the assessee but allowed the appeal of the revenue, hence the present
revision. Learned counsel for the revisionist further submits that there was
no justified reason for the Tribunal to allow the second appeal of the
revenue and restore the assessment order.
4. Per contra, learned Standing Counsel supports the impugned order. He
submits that the first appellate authority has recorded a finding of fact
against the revisionist but still partly allowed the appeal without any
cogent material and therefore, the Tribunal by the impugned order has
rightly restored the assessment order.
5. After hearing the parties, the Court has perused the record.
6. It is not in dispute that the survey was conducted by SIB on 12.09.2012
at the business premises of the revisionist. It is also not in dispute that
vast and various discrepancies in stocks were found, on the basis of which
a best judgment assessment was made after rejecting the books of account
of the revisionist. The First Appellate Authority vide order dated
22.09.2016 partly allowed the appeal. On perusal of the order passed by
First Appellate Authority, it shows that a finding of fact has been
recorded against the assessee but still the same was partly allowed, which
reads as under:
"उपरोक्त विवेचन से स्पष्ट है कि सर्वेक्षण के समय मोके पर विभिन्न वस्तुओ के स्टाक में जो
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3
अन्तर पाया गया है, वह वास्तविक है बैंक है तथा मौके पर अधिक पाया गया माल अपीलार्थी
की नियमित लेखो के बाहर अपवचित खरीद से सम्बन्धित रहा है, जिसके सम्बन्ध में अपीलार्थी
द्वारा मैन्युपुलेट कर उसे लेखो में दर्ज दिखाने का प्रयास किया गया है। इसी प्रकार स्टाक
रजिस्टर में दर्ज माल मौके पर कोई स्टाक न पाये जाने के कारण ऐसे माल की सर्वेक्षण तिथि
के पूर्व ही लेखो के बाहर अपवंचित बिक्री कर दिया जाना एवं सर्वेक्षण के बाद उसे लेखो में दर्ज
कर मैन्यूपुलेट किया जाना स्पष्ट होता है। अतः उपरोक्त समस्त तथ्यों एवं परिस्थितियो को
देखते हुए अपीलार्थी के लेखे विश्वसनीय नहीं रह जाते है तथा उनमें मैन्यूपुलेशन होनाः प्रमाणित
होने के कारण विद्वान कर निर्धारण अधिकारी द्वारा संगत वर्ष हेतु अपीलार्थी की लेखा पुस्तको
एवं घोषित आंकड़ों को अस्वीकार कर न्याय एवं विवेक से किये गये कर निर्धारण का समर्थन
किया जाता है।"
7. Against the order of the First Appellate Authority, a second appeal was
filed by the revenue as well as by the assessee. The record shows that
various discrepancies have been pointed out which have not been reversed
by the First Appellate Authority, therefore, the Tribunal being last Court
of fact recorded a finding of fact which reads as under:
"प्रथम अपीलीय अधिकारी द्वारा सर्वेक्षण के समय मौके पर लेखों की तुलना में अधिक पाये
गये विभिन्न वस्तुओं का स्टाक व उसका अनुमानित मूल्य निम्न प्रकार निर्धारित किया गया है:-
क्र०सं० वस्तु का नाम सर्वेक्षण के समय अधिक पाया गया स्टाॅक अनुमानित मूल्य
1- गेहूं 456.84 कु० 6,00,000/-
2- सरसों 293.50 कु० 10,65,000/-
3- मेथी 15.50 कु० 36,000/-
4- बारदाना (पुराना) 182 कु० 1,00,000/-
5- तारामीरा 343.55 कु० 12,55,000/-
योगः- 30,56,000/-
उपरोक्त विवरण के अनुसार विभिन्न वस्तुओं का कुल रू0 30,56,000/- का स्टाक अधिक
पाया गया है, जिसकी अपवंचित खरीद बिक्री की गयी है। इसके अतिरिक्त 383 कु० चावल
अनुमानित मूल्य रू० 8,00,000/- की अपवंचित बिक्री किया जाना पाया गया है।
प्रथम अपीलीय अधिकारी द्वारा गेंहूँ, चावल, सरसों, तारामीरा की अपवंचित खरीद रू0
72,00,000/- व अपवंचित बिकी रू० 80,00,000/- एं व मेथी व बारदाना की अपवंचित
खरीद रू0 2,25,000/- पंच 3,00,000/- निर्धारित की गयी है। कर निर्धारण अधिकारी द्वारा
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निर्धारित अपवंचित खरीद बिक्री में कमी किये जाने का कोई भी समुचित आधार आदेश में
अंकित नहीं किया गया है।
अतः उपरोक्त तथ्यों के प्रकाश में अपीलकर्ता व्यापारी द्वारा प्रस्तुत अपील बलहीन होने के
कारण अस्वीकार किये जाने तथा विभागीय अपील स्वीकार किये जाने तथा प्रथम अपीलीय
आदेश अपास्त करते हुए कर निर्धारण आदेश समर्थन किये जाने योग्य है।"
8. The finding of fact recorded by the Tribunal has not been assailed
specifically in the revision. The Tribunal records that there was huge
discrepancy found and therefore once such discrepancy has been found at
the time of survey, the rejection of books of account as well as
enhancement is justified.
9. In view of above, no interference is called out. The present revision is
dismissed. Question of law is answered accordingly.
(Piyush Agrawal,J.)
September 23, 2026
Abhishek Gupta
Digitally signed by :-
ABHISHEK GUPTA
High Court of Judicature at Allahabad
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