Shalimar Furnishers Vs. Commissioner of Trade Tax - Court Judgment

Excerpt:
- - (1) whether, on the facts and in the circumstances of the case, the trade tax tribunal was justified in not accepting the report of the valuer which clearly indicates that the investment in the applicant unit was less than rs. however, learned counsel states that these assessment orders were passed by the authorities themselves, so they were well aware of these orders. 7. the learned counsel for the assessee has argued that the order passed in appeal by the tribunal is clearly in ignorance of this material and also against the spirit of the orders of the high court in the revision. however, having heard learned counsels on both sides and having perused the material on record as well as the order of the tribunal it is clear that although the tribunal has noted that after the assessee had filed the first valuation, the assessee sought to file the second valuation report made by an architect and although the same was noticed by the tribunal in its order, the tribunal has given no reason for rejecting it and has completely ignored it. 12. insofar as the second ground for rejecting the case of the assessee is concerned, the assessment orders passed by the assessing authorities for three consecutive years have been placed by the assessee before this court and because these orders were passed by the assessing authorities themselves, they must, therefore, have been well within the knowledge of the assessing authority and these assessment orders should have been formed the basis for reaching the conclusion by the tribunal as to whether the manufacturing activities of the assessee had been discontinued for six months or not, but this was also not done by the tribunal. the consideration will be made by the tribunal on the basis of material, which is already there on record before the tribunal as well as the entire record, which has been placed before this court.bharati sapru, j.1. heard learned senior counsel sri bharat ji agrawal assisted by sri piyush agrawal, learned counsel for the assessee and sri b.k. pandey, learned standing counsel for the state.2. the present revision has been filed by the assessee under section 11 of the u.p. trade tax act, 1948 by the assessee being aggrieved by the order passed by the tribunal dated september 23, 1999. the questions of law referred to are hereunder:(1) whether, on the facts and in the circumstances of the case, the trade tax tribunal was justified in not accepting the report of the valuer which clearly indicates that the investment in the applicant unit was less than rs. 3,00,000?(2) whether, on the perusal of the registration certificate issued under the u.p. and central sales tax act, 1956 the inference drawn by the tribunal that the applicant has used the challan of some other firm appears to be incorrect?(3) whether, on the facts and circumstances of the case, the trade tax tribunal was justified in holding that the applicant-firm is closed for more than six months at a stretch on the ground that the applicant has filed no returns under misconception of law?(4) whether, in any view of the matter the order passed by the trade tax tribunal is illegal and is liable to be set aside?3. the facts of the case are that the applicant established a new unit for the manufacture of wooden and steel furnishers and was registered as small-scale industry with the director of industries. the applicant, therefore, made an application under section 4a of the u.p. trade tax act, 1948 for grant of certificate. at the time when the applicant made an application under section 4a, the applicant had itself disclosed the total investment made for the factory of a sum of rs. 4,46,000. the divisional level committee, therefore, rejected the application of the applicant on two grounds: firstly, the investment made by the applicant being more than rupees three lakhs, he was not entitled to be granted a recognition certificate under section 4a in the absence of not having a registration under the factories act, which is one of the essential requirements under the provisions of section 4a; the second ground for rejection of the application was that the applicant had given a return of nil sales and, therefore, it appeared that there was no manufacturing activity at all done by the applicant and the unit was closed for more than six months at a stretch.4. aggrieved by the rejection of the divisional level committee, the applicant filed a review application on july 13, 1992 in which it claimed that the initial investment shown was not correct but it was less than rs. 3 lakhs and, therefore, they were not required to get a registration under the factories act. in order to establish this fact the applicant sought to place on the record of the review case a report made by an architect dated 25th of october, 1997, which certified that the valuation of the entire land, building, plant and machinery was rs. 2,49,854. however, the review application was also dismissed by an order dated january 13, 1993.5. aggrieved with this order the assessee filed revision no. 278 of 1993, which was decided on september 28, 1995 by which this court set aside the order of the divisional level committee and remanded the matter to the divisional level committee to decide the review application afresh after giving to the assessee a fresh opportunity of hearing and also to allow it to give evidence to establish its case. the divisional level committee on remand also rejected the case of the assessee by its order dated july 26, 1997 and, therefore, the assessee filed an appeal against the aforesaid order. the trade tax tribunal by its order dated september 23, 1999 has dismissed the appeal of the applicant. the learned counsel for the assessee has argued that there are two obvious mistakes, which have been made by the tribunal in this case and, thus, the tribunal has erred in dismissing the appeal of the applicant on the ground that the investment of the unit was more than three lacs by ignoring material evidence that was produced by the assessee in the shape of the certificate of the architect which showed that the valuation of the factory was less than three lacs. he has argued that the tribunal has simply been swayed by the fact that when the assessee made an application under section 4a it disclosed the value of the land and building of the factory to be rs. 4,56,000. he has argued that although the tribunal has taken note of the fact that the assessee produced before the tribunal a certificate issued by an architect valuing the land at rs. 2,49,000 odd, it has given no reason for rejecting it and in fact has not even examined the worthiness of the said certificate.6. the second ground for rejecting the application by the tribunal, he states, is also erroneous in that the fact that the applicant has not filed the returns is also established from the fact that the assessee had filed assessments for the years 1987-88, 1988-89, 1989-90. these assessment orders have been placed on the record of the case now before this court by way of a supplementary affidavit. however, learned counsel states that these assessment orders were passed by the authorities themselves, so they were well aware of these orders.7. the learned counsel for the assessee has argued that the order passed in appeal by the tribunal is clearly in ignorance of this material and also against the spirit of the orders of the high court in the revision.8. the learned standing counsel has argued in support of the order of the tribunal and has argued that the order is justified. however, having heard learned counsels on both sides and having perused the material on record as well as the order of the tribunal it is clear that although the tribunal has noted that after the assessee had filed the first valuation, the assessee sought to file the second valuation report made by an architect and although the same was noticed by the tribunal in its order, the tribunal has given no reason for rejecting it and has completely ignored it.9. the learned counsel for the assessee had argued that a saw mill or a furniture workshop, as the one which the assessee has made, does not require a large tract of land.10. he has argued that the earlier report included the entire tract of land of 15,418 square feet, which is not the requirement of saw mill whereas the factory of the assessee was situated only in 2,400 square feet.11. this matter could very easily have been examined by the tribunal and also the tribunal would have made an independent assessment or valuation of the actual factory area and its surroundings.12. insofar as the second ground for rejecting the case of the assessee is concerned, the assessment orders passed by the assessing authorities for three consecutive years have been placed by the assessee before this court and because these orders were passed by the assessing authorities themselves, they must, therefore, have been well within the knowledge of the assessing authority and these assessment orders should have been formed the basis for reaching the conclusion by the tribunal as to whether the manufacturing activities of the assessee had been discontinued for six months or not, but this was also not done by the tribunal.13. thus, the contentions of the learned counsel for the assessee that the order of the tribunal has been passed by ignoring material evidence have substance. the contentions as raised by the learned counsel for the assessee are, therefore, accepted by this court. the matter is remanded to the tribunal for a fresh consideration. the consideration will be made by the tribunal on the basis of material, which is already there on record before the tribunal as well as the entire record, which has been placed before this court. the assessee will be given an opportunity once again to establish his case on the basis of the material, which has been produced in this revision also. the matter on remand may be considered by the authority concerned within a period of three months from the date of production of a certified copy of this order before it. the certified copy of this order may be placed before the tribunal within 15 days of its issuance. the order of the tribunal dated september 23, 1999 is set aside.14. this revision is allowed.