M/S Hankul Packwell PVT. LTD. Jhansi vs. Commissioner Of Commercial Tax U.P. Lucknow

Court No. - 1

Case :- SALES/TRADE TAX REVISION No. - 42 of 2017

Revisionist :- M/S Hankul Packwell Pvt. Ltd. Jhansi Opposite Party :- Commissioner Of Commercial Tax U.P. Lucknow Counsel for Revisionist :- Krishna Agarawal Counsel for Opposite Party :- C.S.C. Connected with Case :- SALES/TRADE TAX REVISION No. - 154 of 2017

Revisionist :- M/S Hankul Packwell Pvt. Ltd. Jhansi Opposite Party :- Commissioner Of Commercial Tax U.P. Lucknow Counsel for Revisionist :- Krishna Agarawal Counsel for Opposite Party :- C.S.C.

Hon'ble Piyush Agrawal,J. Heard learned counsel for the parties. Both the above mentioned revisions have been listed together as the issue involved in the same are interlinked, hence the same are being heard and decided together by this common judgment. The above mentioned revisions have been filed against the order dated 11th January, 2017 passed by Commercial Tax Tribunal, Jhansi in Second Appeal Nos. 454 of 2016 and 455 of 2016 for the Assessment Years 2010- 11 and 2011-12 under the U.P. Value Added Tax Act. The questions of law framed in Sales/Trade Tax Revision No. 42 of 2017 are as follows:- 1.) Whether, the Tribunal is legally justified upholding the reversal of input tax credit on the goods stock transferred and manufactured out of Ex. U.P. raw material without issuance of show cause notice by the Assessing Authority? 2.) Whether, the Tribunal is legally justified in in rejecting the claim of the applicant for ITC in absence of production of stock and manufacture registers while the same were produced before the Tribunal and a copy of the details have been filed before it, thus rendering the order of the Tribunal perverse? 3.) Whether in view of the fact that the applicant has maintained separate accounts for Ex. U.P. and U.P. purchase raw material and the stock transferred furnished goods have been therefore, the applicant was entitled for the benefit of input tax credit and the reversal, is wholly unjustified and illegal? The questions of law framed in Sales/Trade Tax Revision No. 154 of 2017 are as follows:- 1.) Whether, the Tribunal is legally justified upholding the reversal of input tax

credit on the goods stock transferred and manufactured out of Ex. U.P. raw material without issuance of show cause notice by the Assessing Authority? 2.) Whether, the Tribunal is legally justified in in rejecting the claim of the applicant for ITC in absence of production of stock and manufacture registers while the same were produced before the Tribunal and a copy of the details have been filed before it, thus rendering the order of the Tribunal perverse? 3.) Whether in view of the fact that the applicant has maintained separate accounts for Ex. U.P. and U.P. purchase raw material and the stock transferred furnished goods have been therefore, the applicant was entitled for the benefit of input tax credit and the reversal, is wholly unjustified and illegal? The short submission raised by counsel for the revisionist is that the books of accounts were produced before the authorities maintaining separate stock register so far as purchases of raw material within the State as well as from outside the State. When, the raw materials used for manufacturing of goods were clearly mentioned in the stock register. Counsel for the revisionist further submits that specific grounds were taken before the Appellate Authorities. The grounds of appeal have been annexed as annexures-2 and 4 for first appeal and second appeal respectively where specific grounds were taken. Further written statements filed before the Tribunal has been annexed as annexure-7 where ground nos. 9 and 13 was specifically pressed but the Tribunal without considering the same has arbitrarily recorded that no books of account were produced. He prays for remanding the matter. Per contra, learned Standing Counsel supports the order of the authorities below and submits that reversal of input tax credit (RITC) has rightly been done as the dealer has failed to bring on record any material to show that the raw materials purchased from outside the State were used while making the stock transfer. He prays for dismissal of the revision. After hearing learned counsel for the parties, the Court has perused the record. Admittedly, the revisionist is manufacturing narrow women bags for which the raw materials were purchased within the State as well as from outside the State of U.P. During the assessment proceedings, the revisionist claimed benefit of input tax credit for the goods purchased on payment of tax while passing the order, the books of account and the disclosed turn over were accepted but reversal of input tax credit was made on the ground that the dealer had made the stock transfer and used the raw material for which he was not entitled for input tax credit. Further the books of account was not shown which could relate to the raw material purchased from outside the State of U.P. On perusal of various annexures referred above, it appears that the books of account were produced which shows that the raw material purchased from outside the State of U.P. was also used and, therefore, the stock transfer made from such goods the benefit claimed by the revisionist cannot be denied but the Tribunal has not recorded any finding to that effect and has recorded that no books of account has been produced which is contrary to 2 STRE No. 42 of 2017

record. In view of the above, the order of the Tribunal is set aside and the matter is remanded to the Tribunal for fresh consideration on the material available on record. The revisions are allowed. The questions of law are answered accordingly. It is expected that since the matter is very old, the Tribunal may take all possible effort to decide the same within a period of three months from the date of receipt of a copy of this order. The revisionist undertakes to serve the copy of this order within a fortnight. In the event of failure on the part of the revisionist, benefit of this order shall not be accorded to the revisionist. Order Date :- 30.3.2022 Shiraz 3 STRE No. 42 of 2017 Judicature at Allahabad