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2015 (12) TMI 1086 - UTTARAKHAND HIGH COURT

2015 (12) TMI 1086 - UTTARAKHAND HIGH COURT - [2016] 89 VST 442 (Utk) - Revision petition - Whether on the facts and circumstances of the case, the learned Commercial Tax Tribunal was justified in law in confirming the order passed by the assessing authority holding that the revisionist is liable to pay the tax inspite of finding recorded that the first sale is effected by the respondent no.2 - Whether on the facts and circumstances of the case, the authority below was justified in law in holdin .....

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S. K. Posti, Advocate For the Respondent : Mr. H.M. Bhatia, Brief Holder. Mr. Pullick Raj Mullick, Advocate ORDER V.K. Bist, J. These two revisions have been filed against the common judgment and order dated 23.X.2009 passed by the Commercial Tax Tribunal, Uttarakhand in Second Appeal No. 12/2005 (A.Y. 1998-99) and 13/2005 (A.Y. 1999-2000), and this Court has to deal with a common question of law and, therefore, for the sake of convenience, both the revisions are consolidated and are being deci .....

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.1996 to 25.07.2000, the contract was with the revisionist, and thereafter, it was given to some other person. The assessing authority by invoking Section 7(3) of U.P. Trade Tax Act, 1948 (hereinafter referred to as the Act), passed assessment order, which was based upon the amount received by the revisionist. The revisionist was assessed to the tax liability of ₹ 1,76, 750/- and ₹ 1,45,750/- respectively for the assessment years 1998-99 and 1999-2000. Two appeals were filed by the a .....

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ack to the Tribunal for rehearing the revisionist as well as the 2nd respondent and then to decide the matter afresh in accordance with law, and the Tribunal in its part, set-aside the order passed by first appellate order and remanded the matter to the first appellate authority. The First Appellate Authority held the 2nd respondent not exigible, while the revisionist was assessed to the tax liability on the sales of cooked food and other eatables. However, the assessed taxable turnovers and tax .....

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nd respondent as well as learned counsel for the Department. 4. These revisions were admitted by this Court on the following substantial questions of law:- (A) Whether on the facts and circumstances of the case, the learned Commercial Tax Tribunal was justified in law in confirming the order passed by the assessing authority holding that the revisionist is liable to pay the tax inspite of finding recorded that the first sale is effected by the respondent no.2? (B) Whether on the facts and circum .....

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the order is placed in its name and the purchasers/consumers are also its members. The sale consideration is received by 2nd respondent. Further, bills were issued by the assessee/ revisionist on behalf of 2nd respondent, however, payment was always received by 2nd respondent and after deducting all the amount, made the balance payment to the assessee/ revisionist, which is nothing but his job-charge as well as the cost of the raw material, which is purchased on behalf of 2nd respondent. It is .....

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2nd respondent. It is submitted that as per findings of First Appellate Authority, there were two types of sales, one was credit sale i.e. the major sale and another was cash sale. He submitted that admittedly, the 2nd respondent realised the credit sale in their account and also the cash sale, and on submission of bills, payment was made to the assessee by 2nd respondent, through cheques. Further, while making payment to the assessee, the 2nd respondent deducted 12 per cent commission + water c .....

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50,164/-, which demonstrates that the amount received by the revisionist was cost of raw materials as well as his job-charge and nothing else, and the 12 per cent commission, as collected by 2nd respondent, was nothing, but a profit of the sale effected. He submitted that it is an admitted position of law that notification dated 30.11.1998 is applicable in the case in hand, where the rate of tax of cooked food is 5 per cent and tax is leviable at the point of sale to consumer. Further, as per th .....

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ation issued under the taxing statute, tax become payable at such rate and as such point, as mentioned in the notification. And, if tax is leviable at the point of sale to consumer, the 2nd respondent issued the cash memos and supplied food to consumers, who are his members and also received the sale consideration, therefore liability to pay tax is on 2nd respondent. He contended that the assessee has no control over the sale made to the consumers, therefore the assessee cannot be made liable to .....

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tions of the club; (b) to promote social intercourse and to provide entertainments and healthy recreations for its members; (c) to join, amalgamate or reciprocate with any other club or association, whether incorporated or not, intended for the promotion of new objects in which the club is interested, and (d) the club incorporated under Indian Companies Act, as a Limited Company/ Association formed for those purpose, and not for gains. He contended that 2nd respondent had engaged a messing contr .....

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serving the prepared food to the members of the club. The 2nd respondent, on its part, was realising 12 per cent commission against the messing bills on account of usage of utilities, provided to messing contractor, i.e. furniture and fixtures, fans, stabilizers and electrical appliances. The messing contractor supplied the prepared food and even the service staff was on the employment rolls of the messing contractor. The covenant establishes that all the assets of the club, including storage s .....

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ent further submitted that after the inquiry carried out by Special Investigation Branch, the 2nd respondent ensured that the messing contractor be duly registered with the Trade Tax Department, and that the arrangement is continuing, therefore, when the Department was satisfied that the messing contractor was defacto dealer; liable for registration under the Trade Tax Act, they could not consider the 2nd respondent as dealer for the past period under dispute, inasmuch as, there was no change in .....

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to the messing contractor. 8. Learned Brief Holder appearing on behalf of the Department, on the other hand, submitted that the tax liability is accepted to both the contesting parties and it is only upon them to decide as to on which of the parties, the tax liability rests, either on the assessee or on 2nd respondent. He refrained to contend on the merits and de-merits of the case. 9. While examining facts of the case, we first found the case of revisionist correct as respondent no.2 entered t .....

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In such circumstances, if respondent no.2 is compelled to pay tax on sale, grave injustice would be done to him. 10. We also find that while partly allowing the appeals filed by the assessee, the First Appellate Authority reduced the taxability of the assessee, holding that the assessee has done the job of purchase, manufacture and sale on the basis of oral agreement. Dehradun club is a group of members, and consumer of cooked food. The revisionist has accepted not maintaining any accounts, wher .....

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judgment in the following manner: In the above case, it was clearly reveals that Sri N.S. Bisht messing contractor have received the payment as cash and through bank for the supply of cooked food for the year 98-99 and 99-2000. M/s Dehradun club ltd. have filed the statement of the bank regarding the running payment made to the N.S. Bisht after deducting the commission and expenses, which shows that the payment is made to Mr. Bisht by cheque. The raw material was purchased by N.S. Bisht himself, .....

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or is seems to be logical, because all the expenses regarding the manufacturing of cooked food was born by the contractor. The payment of 12% commission by club are mentioned as other income in audit report, which is ₹ 2,34,064.00/- and 2,26,177.00/- respectively. This amount was deducted by the club in lieu of facilities of kitchen, dining, and sale which is seems to be logical. On this point both the parties were also cross-examine. Both the parties agreed deduction of 12% commission. Th .....

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ht supply the cooked food and received the payment. In the present case Sri N.S. Bisht have done the job of purchase, manufacture and sale on the basis of oral agreement. Dehradun club is a group of members, and consumer of cooked food. For all process Sri N.S. Bisht have accepted not maintaining any accounts, whereas Dehradun Club have produced the regular account book, audit report and the true photo copy of the fourth night bills produced by contractor. The Dehradun Club made available the fa .....

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