Allahabad High Court
M/S. Raj Brick Manufacturing ... vs The Commissioner Of Commercial ... on 1 August, 2019
Bench: Saumitra Dayal Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD
?Court No. - 1
Case :- SALES/TRADE TAX REVISION No. - 2027 of 2008
Revisionist :- M/S. Raj Brick Manufacturing Company
Opposite Party :- The Commissioner Of Commercial Taxes Lucknow
Counsel for Revisionist :- Suyash Agarwal
Counsel for Opposite Party :- C.S.C.
Hon'ble Saumitra Dayal Singh,J.
1. The present revision has been filed by the assessee against the order of the Trade Tax Tribunal, Meerut dated 08.05.2008 in Second Appeal No.226 of 2002 for the A.Y. 1999-2000 (UP). By that order, the Tribunal has dismissed the appeal filed by the assessee and partly allowed the appeal filed by the revenue and thereby increased the estimation of turnover (on best judgment basis) from Rs. 20,00,000/- (on bricks), Rs. 7,50,000/- (on purchase of coal) to Rs. 28,02,500/- (on bricks) and Rs.12,00,000/- (on purchase of coal).
2. The present revision has been pressed on the following question of law:-
"Whether in absence of any reasoning given by the Tribunal either to reject the estimation made by the first appeal authority or in support of its own estimation, the Tribunal could have made an estimation of the turnover in excess of that made by the first appellate authority?"
3. Heard Sri Ankur Agarwal, Advocate holding brief of Sri Suyash Agarwal, learned counsel for the applicant-assessee and Sri B.K. Pandey, learned Standing Counsel for the revenue.
4. Learned counsel for the assessee would submit, the assessee had run the brick kiln only for a short period during the first half of the A.Y. 1999-2000. In the survey dated 30.06.1999, the brick kiln of the assessee was found closed. In such circumstances, turnover Rs.17,550/- disclosed by the assessee was wholly correct and there was no reason for the authorities to make any estimation over and above that. Alternatively, it has been submitted the first appellate authority had made detailed discussion of the running of the brick kiln by the assessee. It was found that the assessee had started the brick kiln from 17.04.1999 and that during the period from 19.05.1999 to 30.06.1999, the brick kiln had not completed one round of firing. Accordingly, the total firing period was computed at 80 days which has also not been disturbed by the Tribunal. Then, keeping in mind the size of the brick kiln, the first appellate authority estimated the per day production of bricks at Rs.20,00,000/-. Accordingly, the daily production of bricks was estimated at 20,000. Correspondingly, the turnover of purchase of coal from unregistered dealer was estimated at Rs.7,50,000/-. However, while setting aside the order of the first appellate authority and making enhancement to the estimated turnover of bricks and coal, the Tribunal neither offered any reasoning to disbelieve or reject the estimation made by the first appellate authority nor it has given any independent reasoning in support of the enhancement made by it of Rs. 8,02,500/- to the turnover of bricks and Rs.4,50,000/- to the turnover of purchase of coal.
5. Responding to the above, learned Standing Counsel would submit, admittedly, the assessee had not maintained any books of account, and therefore, the same had been rejected. As to estimation, it has been submitted certain amount of guess work is always involved in these matters. The Tribunal took note of the fact that the capacity of the brick kiln operated by the assessee was 10,00,000 bricks. Therefore, the estimation of production of 30,000 bricks per day is neither excessive nor arbitrary. Also, it has been submitted, the benefit on account of breakage has been given, and therefore, the order of the Tribunal does not warrant any interference.
6. Having heard learned counsel for the parties and having perused the record, though, it is true that the Tribunal being the last fact finding authority is fully empowered to record its findings of fact especially in cases like these involving estimation of turnover, however, the estimate made whether by the Assessing Officer or the First Appellate Authority or the Tribunal has to be based on cogent material and evidence on record. The same cannot be fanciful or based on imagination or whims. Further, in the event of estimation made by the Assessing Authority or by the First Appellate Authority, the higher appellate authority must give its own reasons to record a different finding of fact.
7. In the present case, it is seen that the first appellate authority had recorded specific reasons to reduce the estimation of turnover made at Rs. 48,00,000/-(for bricks) and Rs.12,00,000/- (for coal) to Rs.20,00,000/- and Rs.7,50,000/- respectively. The first appellate authority had found that the assessee had run the brick kiln for only 80 days and further it had not been able to complete one cycle during the period May to June, 1999. Keeping the manufacturing capacity of the brick klin in mind, the first appellate authority observed that the assessee would have manufactured 1,00,000 bricks in five days. Accordingly, the estimate was made consistent to such facts.
8. The Tribunal in it's order has neither found the reasoning of the first appeal authority to be erroneous or lacking nor it has found any further fact or reason to make enhancement to that estimation. To that extent, the order of the Tribunal is not supported by any reasoning or evidence and is therefore not sustainable.
9. Normally, the Court would have remanded the matter to the last fact finding authority to pass a fresh order, however, in view of the fact that the assessment arose out of running of a brick kiln that too for A.Y. 1999-2000 since when the U.P.Trade Tax Act, 1948 and its successor enactment the U.P. Value Added Tax Act, 2008 stand repealed and further in view of the fact that the estimation made by the first appellate authority appears to be well reasoned and based on material and evidence on record, so as to bring final closure of the proceedings, it is provided that the order of the Tribunal be set aside and the estimation be sustained.
10. In view of the above, the question of law as framed above is answered in the negative i.e. favour of the assessee and against the revenue.
11. Accordingly, the present revision is allowed.
Order Date :- 1.8.2019
S.Chaurasia
