Rajes Kumar, J. - (1.) PRESENT revision under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 19^th December. 2006 relating to the assessment year, 2006 -2007 by which the Tribunal has sustained the demand of additional security to the extent of Rs. 5 lacs under Section 8 C of the Act.
(2.) APPLICANT was carrying on the business of fertilizer, cement, iron steel etc. It is claimed that at the time of grant of registration, applicant had deposited a sum of Rs. 30,000/ - towards security and subsequently a sum of Rs. 50.000/ - was furnished towards additional security of two registered dealers on 16.08.2001. Wlien the applicant opened the Branch at Gaytree Complex. Station Road. Deoria w.e.f. 23.01.2003, applicant further submitted additional security of Rs. one lac in the form of NSC. Thus the total security furnished was to the extent of Rs. 1, 80,000/ -. Assistant Commissioner, Trade Tax, Padrauna. Kushinagar issued notice under Section 8 C of the Act on 5.9.2006 asking the applicant to show cause why a sum of Rs. 50 lacs be not demanded as additional security in the form of bank guarantee. Reasons given in the show cause notice was; that the bills were not verifiable; the goods transported during the years, 2005 -2006 and 2006 -2007 were outside the books of account for which penalty was levied: On demand complete books of accounts have not been produced; purchases have not been got verified from the bills; the information received from various sources reveals that the applicant was involved in evasion of tax. The applicant filed reply to the aforesaid show cause notice. The ass sing officer vide order dated 20^th September. 2006 passed the order under Section 8 C of the Act and asked the applicant to furnish the additional security of Rs. 50 lacs. Security was demanded on the ground that on enquiry, it was found that the carbon copy of the bill has not been maintained in violation of Section 8 A (4) of the Act; bills are non -verifiable and the purchase vouchers, rokar khata and stock register have not been produced; survey was made by the Trade Tax Officer (SIB) on 9.9.2006 and on the basis of which assessment order for the months of April, May, June and July. 2006 were passed levying the tax at Rs. 1 lac, 1,50 lacs, 1.30 lacs and 3.40 lacs respectively. Being aggrieved by the order passed under Section 8 C of the Act. applicant filed appeal before the Joint Commissioner (Appeals) who vide order dated 27.09.2006 allowed the appeal in part. Appellate authority reduced the demand of additional security to Rs. 5 lacs. Being aggrieved by the order of the Joint Commissioner (Appeals), applicant as well as Commissioner of Trade Tax filed appeals before the Tribunal. Tribunal by the impugned order, dismissed both the appeals and confirmed the demand of additional security of Rs. 5 lacs. Heard learned Counsel for the parties.
(3.) LEARNED Counsel for the applicant submitted that the demand of additional security is patently illegal, arbitrary and in contravention to the Provisions of Section 8 C (3) of the Act. He submitted that the notice -dated 5.9.2006 issued under Section 8 C of the Act was vague and the tax for the assessment year, 2006 -2007 has not been estimated. He submitted that before the issue of the notice under Section 8 C of the Act no exercise has been done for estimating the tax for the assessment year, 2006 -2007 and the demand of additional security to the extent of Rs. 50 lacs is based on no material. He submitted that in the order passed under Section 8 C of the Act, assessing authority has relied upon the provisional assessment orders for the months of April, May, June and July. 2006. while there was no reference of such provisional assessment orders in the show cause notice and, thus, the order passed by the assessing authority under Section 8 C of the Act demanding additional security to the extent of Rs. 50 lacs was in violation of principle of natural justice and contrary to the provisions of Section 8 C of the Act. He submitted that even though the order passed by the assessing authority under Section 8 C of the Act was wholly illegal the first appellate authority as well as Tribunal has illegally sustained the demand of security' to the extent of Rs. 5 lacs.;