Rajkamal Biscuit Factory vs Commissioner of Trade Tax

M.C. Agarwal, J.—By this revision petition u/s 11 of the U.P. Trade Tax Act, 1948 the revisionist challenges an order dated April 21, 1999 passed by the Trade Tax Tribunal, Moradabad, whereby it dismissed the dealer''s second appeal No. 778 of 1998 for assessment year 1995-96.

I have heard learned counsel for the revisionist Sri M. Manglik and Sri B.K. Pandey, learned Standing Counsel.

The revisionist is a biscuit manufacturer and had returned a turnover of Rs. 26,35,851 which after a proper examination of its accounts was accepted by assessment made under Rule 41(8) of the U.P. Trade Tax Rules, 1948. Subsequently there was a survey at the factory premises of the dealer on May 19, 1997 during which some register was found which showed that during the periods January, February and March, 1996 the revisionist had employed 33 persons while during the original assessment only 28 employees were declared. On this basis a notice u/s 21 was issued and reassessment was made assessing an additional turnover of Rs. 75,00,000. The dealer appealed to the Deputy Commissioner (Appeals) without success. On appeal to the Tribunal the additional turnover was reduced to Rs. 15,00,000.

The counsel for the revisionist contended that the plant manufacturing the biscuits is an automatic plant and, therefore, the number of employees could not effect the production. This was the contention of the assessee before the assessing officer as well who has not controverted the dealer''s contention that it had an automatic plant nor in the reassessment the assessing officer has mentioned how the extra number of employees could increase the production. The Tribunal has also not mentioned how in an automatic plant extra number of employees could effect the production. The earlier assessment was made after examining the books of accounts of the dealer and in the survey no incriminating material in the form of additional purchases of raw material or of additional sale was discovered. The extra number of employees was not a circumstance from which extra production could be assumed when the plant was automatic. The reassessment was thus based on conjectures and there was no reason to believe that any part of the turnover has escaped in the return. The Tribunal''s order dismissing the dealer''s appeal is, therefore, not legally tenable.

The revision petition is allowed and setting aside the Tribunal''s order, it is ordered that the revisionist''s aforesaid appeal shall stand allowed and the reassessment u/s 21 stands quashed.