RAJES KUMAR,J. - (1.) PRESENT revision under Section 11 of the U.P. Trade Tax Act, 1948 (hereinafter referred to as, 'the Act') is directed against the order of the Tribunal dated December 31, 2005 relating to the assessment year 1998 -99.
(2.) THE applicant was engaged in the manufacture and sales of rice. Paddy is the raw material. Paddy was liable to tax at the point of first purchase under Section 3D of the Act. Applicant purchased the paddy and paid the tax being first purchaser and out of the paddy manufactured rice. During the year under consideration, applicant has sole rice to RFC for Rs. 1,17,42,042 during the period April 1, 1998 to December 22, 1998 and for Rs. 76,79,298.70 during the period December 23, 1998 to March 31, 1999. For the aforesaid period, rice was admittedly liable to tax at the rate of 2.8 per cent and 3.2 per cent respectively in the hand of the applicant. The total liability of tax on the aforesaid sales to RFC was Rs. 5,74,514.71. Under Section 15(c) of the Central Sales Tax Act, 1956, applicant was entitled for the adjustment of the amount of tax paid on paddy with the amount of tax payable on the sales of rice. Assessing authority has calculated a sum of Rs. 3,50,070, the amount of tax paid on paddy used in the manufacturing of rice sold to RFC and accordingly, allowed the adjustment of Rs. 3,50,070 with the amount of tax of Rs. 5,74,514.72 payable on the sale of RFC. The total amount of tax payable on the sale of RFC was held at Rs. 2,24,444.72. Applicant realised the tax from the RFC to the extent of Rs. 4,44,844.40 and accordingly claimed refund of Rs. 2,20,399.68. Refund was refused by the assessing authority and the amount has been forfeited under Section 29(2) of the Act. Applicant filed appeal before the Joint Commissioner (Appeals). Joint Commissioner (Appeals) allowed the appeal and has allowed the refund of Rs. 2,20,400. In the appeal filed by the Commissioner of Trade Tax, the order of the Joint Commissioner (Appeals) has been reversed and the order of the assessing authority refusing to refund the amount of Rs. 2,20,339.68 forfeiting the aforesaid amount has been upheld. Heard learned Counsel for the parties.
(3.) LEARNED Counsel for the applicant submitted that the applicant has paid the tax on the amount of paddy from its own account. He submitted that in fact, the applicant was entitled to recover the amount from RFC to the extent of Rs. 5,74,514.72, the amount of tax payable on the sale turnover of rice to RFC. In this way the applicant has realised lesser tax from the RFC and not the excess tax. He further submitted that the amount of Rs. 2,20,339.68 has become excess amount because the applicant has paid the tax on the purchases of paddy, therefore, the excess amount should be returned to the applicant as the tax has been paid on the paddy, it cannot be treated as excess realisation of tax from RFC.;