Rathi Industries Limited vs The Commissioner Commercial Tax

Pankaj Mithal, J.—Heard Sri Bharat Ji Agrawal, Senior Advocate assisted by Sri Shubham Agrawal, learned Counsel for the assessee-revisionist and Sri B.K. Pandey, learned Counsel for the opposite party.

All these revisions are by the same assessee who is a company entitle to exemption u/s 4A of the U.P. Trade Tax Act as per the eligibility certificate dated 26.2.05.

Most of the revisions are defective as certified copy of the impugned order of the Tribunal has not been filed. The revisions are directed against the common order of the Commercial Tax Tribunal NOIDA and that of the Additional Commissioner, Grade-II (Appeals) Commercial Tax Gautam Budh Nagar, as such the filing of the certified copy of the impugned orders separately in all the revisions is dispensed with. Office may proceed to treat the revisions to be in order and to allot regular number to each one of them.

The assessing authority vide order dated 26.3.2010 though accepted the books of the assessee but for the purposes of granting exemption, determined the base production excluding the stock transfer and consignment transfer in view of the Division Bench decision of this Court in Ambica Steels Limited Vs. State of U.P., and the circular dated 25.1.2003. Accordingly vide orders dated 29.9.2009/1.10.2009 higher amount of tax was imposed and demanded by making a provisional assessment u/s 25(1) read with Section 13(11) of U.P. V.A.T. Act.

Aggrieved by such demand, assessee preferred separate appeals before the Additional Commissioner along with an application for stay of realization of the disputed tax. Pending the appeals, in most of the cases vide order dated 18.9.2010 stay in respect of 50% of the amount and in few cases to the extent of 25% was granted. Not satisfied, further appeals to the Tribunals were preferred wherein vide orders dated 21.10.2010, in most of the cases the stay of realization of the disputed tax upto 50% has been upheld and in some of the cases stay upto 75% and in one case upto 90% has been granted.

The orders passed on the stay applications by the Tribunal and the Additional Commissioner have been assailed in the present revisions and it has been contended that as the judgment and order passed in the case of Ambica Steels Private Ltd. (supra) has been overruled by the full bench decision of this Court in the case of M/s Hindustan Lever Limited v. State of U.P. and Ors. and connected matters delivered on 27.10.2010, the assessee is entitled to full stay.

The Division Bench decision of this Court in Ambica Steels Pvt. Ltd. (supra) has been held to be no longer good law and stands overruled by the aforesaid full bench decision and it has been held that the assessees-dealers are entitle to exemption of tax over and above the base production including the quantity of stock transfer and consignment transaction.

In view of the aforesaid legal position the assessee undoubtedly has a strong prima facie case and apparently the demand of tax raised against the assessee may not stand. In such circumstances relying upon a Supreme Court decision of M/s Pennar Industries Ltd. v. State of Andhra Pradesh and Ors. 2009 (39) NTN 126, this Court in M/s Honda Siel Cars (India) Ltd. v. Commissioner Commercial Taxes, U.P. Lucknow, 2010 U.P.T.C. 1152 directed for the disposal of the pending appeal expeditiously and for the stay of the realization of the entire amount till its decision. Similarly another learned Single Judge of this Court in the case of Kribhco Shyam Fertilizers Ltd. v. Commissioner of Commercial Tax 2009 U.P.T.C. 626 held that where there is a clear evidence that the disputed tax would not ultimately stand, grant of complete stay is proper pending appeal.

Accordingly, I am of the view that in the present revisions also, the assessee is entitle for a full stay during the pendency of the appeals before Additional Commissioner, Grade-II (Appeals) Commercial Tax Gautam Budh Nagar.

In view of the above all the revisions are disposed of finally with the direction to the First Appellate Authority i.e. Additional Commissioner, Grade-II (Appeals) Commercial Tax Gautam Budh Nagar to consider and decide the pending appeals of the assessee-revisionist within two months from the date of production of certified copy of this order which the assessee undertakes to produce within a week from today and till the decision of the appeals realization the disputed amount of tax from the assessee shall remain stayed provided security other than cash and bank guarantee is furnished to the satisfaction of the assessing authority.