Allahabad High Court

M/S BHAGWATI FUELS THRU ITS PROP. GAYA PRASADversusCOMMISSIONER TRADE TAX U.P. LUCKNOW

Decided: 6 May 2026
Bench: PIYUSH AGRAWAL

Holding

The impugned order enhancing the selling rate and turnover without material evidence is quashed.

Summary

M/s Bhagwati Fuels, through its proprietor Gaya Prasad, challenged an order of the Commercial Tax Tribunal that had enhanced the selling rate of its goods and turnover for Assessment Year 2006-07 without any material evidence. The petitioner argued that the Tribunal unjustifiably disbelieved the disclosed turnover and suppressed the selling price, contrary to established case law. The Court examined the records and found that neither the Tribunal nor the lower authorities had any basis for concluding that the dealer sold goods at a lower price, nor had they compared the price with market values as required. Relying on earlier judgments (M/s D.K. Coal Depo and Cargill India Pvt. Ltd.), the Court held that the assessing authority cannot compel a dealer to sell at a particular price and must base any adjustment on market evidence. Consequently, the impugned order was quashed and the revision was allowed in favour of the assessee.

Issues considered

Whether the Commercial Tax Tribunal was justified in enhancing the selling rate of goods and turnover without any material evidence.
Whether the assessing authority can compel a dealer to sell goods at a particular price.
Whether the impugned order should be sustained in view of the lack of basis for the Tribunal's findings.

Subjects

sales tax
assessment
selling price
turnover
revision
tribunal
quashing order
commercial tax

Judgment

HIGH COURT OF JUDICATURE AT ALLAHABAD
SALES/TRADE TAX REVISION No. - 327 of 2017

M/S Bhagwati Fuels Thru Its Prop. Gaya Prasad
.....Revisionist(s)
Versus

Commissioner Trade Tax U.P. Lucknow
.....Opposite
Party(s)

Counsel for Revisionist(s) : Om Prakash
Counsel for Opposite Party(s) : C.S.C.

CONNECTED WITH:

SALES/TRADE TAX REVISION No. - 328 of 2017, SALES/TRADE TAX
REVISION No. - 329 of 2017,

SALES/TRADE TAX REVISION No. - 330 of 2017, SALES/TRADE TAX
REVISION No. - 389 of 2017

Court No. - 7

HON'BLE PIYUSH AGRAWAL, J.

1. Heard Sri Om Prakash, learned counsel for the revisionist and Shri
B.K. Pandey, learned ACSC for the opposite party.

2. Since the common issue is involved in all the aforementioned revisions,
with the consent of the learned counsel for the parties, the same is decided
by a common order leading case being SALES/TRADE TAX REVISION
No. - 327 of 2017.

3. The instant revision has been filed against the impugned order dated
27.5.2017 passed by the Commercial Tax Tribunal for the Assessment
Year 2006-07 in Second Appeal No. 225 of 2014.

4. The only question pressed by the learned counsel for the revisionist is
that as to whether the Tribunal was justified in enhancing the selling rate
of the goods as well as turn over without any material on record. On the
said basis he submits that the assessing authority has disbelieved the
disclosed turn over on the ground that the revisionist has suppressed the
STRE No. 327 of 2017
2

selling rate of the goods in question. He further submits that the issue in
hand is squarely covered by the judgments of this Court
in SALES/TRADE TAX REVISION No. - 398 of 2013 (M/s D.K.Coal
Depo vs. Commissioner of Commercial Tax Lko) decided on 9.12.
2021and Mr. Cargill India Pvt. Ltd. vs The Commissioner
Commercial Tax (2022 UPTC (Vol. 110)- 187).

5. Relying upon the aforementioned judgments he further submits that the
assessing authority cannot compel the dealer to sell the goods in question
at a particular price.

6. After hearing learned counsel for the parties and the Court has perusal
of the records.

7. The record shows that the Tribunal as well as the lower authorities,
without any basis came to the conclusion that the dealer has sold the
goods at lower price. If the assessing authority is not satisfied with the
disclosed selling price of the dealer, then he is duty bound to determine
the selling price after comparing the same from the current market value
disclosed by other dealer for the relevant assessment years. But the
authorities below have failed to do so, therefore the impugned order
cannot be sustained.

8. In view of the above, since the issue is squarely covered by the
aforesaid judgments of this Court the impugned order cannot be sustained
and is hereby quashed. The revision is allowed.

9. The question of law is answered in favour of the assessee and against
the Revenue.

(Piyush Agrawal,J.)
May 7, 2026
samz

Digitally signed by :-
SYED AKHTARMOHAMMAD MEQDAD
High Court of Judicature at Allahabad

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