RAJES KUMAR, J. - (1.) PRESENT revision under, Section 11 of the U.P. Trade Tax Act (hereinafter referred to as the 'Act') is directed against the order of the Tribunal dated 13th October, 1999 arising from the proceeding under Section 4 -A(3) of the Act.
(2.) APPLICANT is a Private Limited Company incorporated under the Indian Companies Act, 1956 having its registered office at B -2/28, Ashok Vihar, Phase -II, Delhi. Applicant claimed to have established a new industrial unit at C -15, Section -7, NOIDA for the manufacturing of tube light fittings. Claimed to be a new unit, applicant applied for exemption on the turnover of manufactured product under Section 4 -A of the Act. Divisional Level Committee examined the application and issued an eligibility certificate on 21st May. 1991 granting exemption for the period 12th March, 1990 to 11th March, 1996. It appears that on 23rd March, 1991, Sales Tax Officer, Mobile Squad. Mohanganj checked a vehicle loaded with tube light. At the time of checking, bill No. 219 dated 19th March, 1991 issued by the applicant was found. On physical verification it was found that on the packing boxes the name of the manufacturer M/S Grossav Industries, Noida was mentioned. For the aforesaid discrepancy, the goods were seized and subsequently released on furnishing of security. It appears that penalty under Section 13 -A(4) of the Act was levied, which has been deleted in appeal. Thereafter, Commissioner of Trade Tax has issued a notice under Section 4 -A(3) of the Act on 29.07.1995 on the allegation that the applicant was found selling the product manufactured by M/S Grossav Industries, Noida against its bill on the garb of eligibility certificate which amounts to misuse of the eligibility certificate. Applicant filed reply which is Annexure -2 to the Revision petition. Commissioner of Trade Tax vide order dated 17.09.1996 passed an order under Section 4 -A(3) of the Act and has withdrew the exemption from 19lh March, 1991. Commissioner of Trade Tax held that the applicant had misused the eligibility certificate and was found selling the product manufactured by other units and claiming exemption on the strength of eligibility certificate. Being aggrieved by the order of the Commissioner of Trade Tax, Lucknow under Section 4 -A(3) of the Act, applicant filed appeal before the Tribunal. Tribunal by the impugned order dismissed the appeal. Heard Sri Bharat Ji Agrawal, learned Senior Advocate assisted by Sri Piyush Agrawal appearing on behalf of the applicant and Sri B.K. Pandey, learned Standing Counsel. Learned Counsel for the applicant submitted as follows: 1. That the applicant as well as M/S Grossav Industries, Noida were purchasing packing material from M/S Kriti Krafts, Delhi. M/S Kriti Krafts, Delhi had inadvertently supplied the packing material bearing the name of M/S Grossav Industries, Noida and inadvertently in the factory of the applicant no body had noticed this fact and inadvertently the goods manufactured in the unit of the applicant had been packed in the packing material bearing the name of M/S Grossav Industries, Noida. The above mistake was only inadvertent mistake and on the basis of which it cannot be inferred that the eligibility certificate has been misused. 2. That the survey dated 23rd March, 1991 was in existence at the time of the issue of eligibility certificate dated 21st May, 1991. 3. If the inspection of the Sales Tax Officer, Mobile Squad would be a relevant consideration, eligibility certificate should not have been issued. 4. M/S Grossav Industries, Noida manufactures their product in the brand name of Solar while it is admitted that no brand name was found on the goods. 5. The inspected goods were cleared from the factory against Excise Gate pass No. 222 dated 19th March, 1991 on which the excise duty had also been paid. This establishes that the goods found loaded in the vehicle were the goods manufactured in the unit of the applicant. 6. The total -tax on such transaction was petty and for which no one can imagine to evade the tax. 7. The initiation of the proceeding is highly belated and therefore, not justified. 8. The department should have choosen to challenge the eligibility certificate. 9. The seizure of the goods on the ground that the unit was found evading the tax is no ground for refusal of the exemption. 10. No material was pointed out by the authorities below that there was any transfer of goods by M/S Grossav Industries, Noida to the present applicant. 11. The unit of the applicant is situated at C -15, Sector -7, Noida, while the unit of M/S Grossav Industries, Noida is situated at B -78, Sector -5 Noida. Both the units were not adjacent to each other and the entire case of the Revenue is based on surmises and conjuncture.
(3.) LEARNED Standing Counsel submitted that M/S Grossav Industries, Noida is a sister concern of the applicant. The Director of the present company Sri O.P. Agrawal is the brother of the Director Sri Gauri Shankcr Agrawal son of Sri B.M. Agrawal partner of M/S Grossav Industries, Noida. M/S Grossav Industries, Noida was also manufacturing electrical fitting and the unit was exempted under Section 4 -A of the Act and its exemption has been expired. Therefore, to claim the exemption on the manufactured product of M/S Grossav Industries, Noida eligibility certificate of the applicant has been used. He submitted that the certificate dated 10th January. 1996 claimed to have been issued by M/S Kriti Crafts, which is Annexure 4 and certificate dated 22nd April, 1996 of M/S Grossav Industries, Noida, which is Annexure 5 to the revision petition are after thought documents. These two certificates are neither mentioned in reply to the show cause notice nor have been considered and referred in the order of the Commissioner of Trade Tax under Section 4 -A(3) of the Act. There is no reference in the grounds of appeal before the Tribunal nor in the order of the Tribunal. These two documents have not been relied upon before the Tribunal during the course of the argument, therefore, these two documents are the after thought documents and cannot be considered at this stage. He submitted that no evidence has been adduced to prove that M/S Kriti Crafts has dispatched the packing material bearing the name of M/S Grossav Industries, Noida to the applicant by mistake and there is no evidence that M/S Grossav Industries, Noida was manufacturing the goods of solar brand. These are only the claim of the applicant which have not been substantiated by any evidence. In the affidavit filed before the Commissioner of Trade Tax in the order passed under Section 4 -A(3) of the Act, Sri Gauri Shanker Agrawal partner of M/S Grossav Industries, Noida has only confirmed that are purchasing the packing material from M/S Kriti Crafts, New Delhi. lothing has been stated about the brand name or anything else. He submitted that on the facts of the case, it is absolutely clear that the applicant was found selling the goods manufactured by M/S Grossav Industries, Noida against its bill with the view to claim exemption on the strength of the eligibility certificate issued to the unit. Present is the clear case of misuse of eligibility certificate. He further submitted that if the transactions would not have been examined on 23rd March, 1991 the applicant would have successfully claimed the exemption on the goods manufactured by M/S Grossav Industries, Noida.;