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2005 (5) TMI 656 - ALLAHABAD HIGH COURT

2005 (5) TMI 656 - ALLAHABAD HIGH COURT - TMI - Civil Misc. Writ Petition No. 1380 of 2004 - Dated:- 3-5-2005 - R.K. Agrawal AND RAJES KUMAR, JJ. Ashok Kumar for the Petitioner. M.R. Jaiswal for the Respondent. JUDGMENT Rajes Kumar, J. - Petitioner is a contractor and had been awarded a contract by M/s. RAVE Entertainment Private Limited, Kanpur for electrification in RAVE-3, which was executed during the Assessment Year 2001-02. According to the petitioner, contract was a composite contract for .....

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contract for the payment of compounding fee in lump sum in lieu of tax-payable, the petitioner moved an application under compounding scheme for the aforesaid contract with the concerned authorities alongwith copy of the contract dated 13th March, 200 1. Deputy Commissioner (Assessment)-14, Trade Tax, Kanpur accepted the compounding application on 28th February, 2002. In the order it has been stated that the application was moved alongwith the copy of the contract and the total payment received .....

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ment under Section 7-D of the Act. In the notice it was alleged that on the perusal of the agreement it was found that apart from the execution of electrical contract, they have also executed a contract for TV/Telephone network, which does not fall under the electric contract compounding scheme. It appears that in reply to the earlier notice, the petitioner filed a certificate of the contractee, M/s. RAVE Entertainment Private Limited, Kanpur, in which it was stated that the alleged TV/Telephone .....

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unsel to file the counter-affidavit vide order dated 29th September, 2004. Counter-affidavit has been filed annexing the copy of the order 29th September, 2004 passed under Section 7-D of the Act by which earlier order dated 28th February, 2003 has been cancelled and order passed under Section 21 of the Act by which the tax has been imposed on the turnover of ₹ 69,80,000 @ 10 percent. Petitioner filed rejoinder affidavit to the counter-affidavit and also filed amendment application challen .....

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Act have been challenged. 5. Heard Sri Ashok Kumar, learned Counsel for the petitioner and Sri. M. R. Jaiswal, learned Standing Counsel. 6. The contention of the petitioner is that alongwith application under Section 7-D of the Act, petitioner has filed a copy of the agreement and after examining the nature of the contract mentioned in the agreement and after having satisfied that the nature of the contract falls under the compounding scheme, accepted the application under the compounding schem .....

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pounding scheme. He further submitted that once the application is accepted, it cannot be cancelled unless a case of misrepresentation or concealment of fact is made out. He submitted that copy of the agreement was filed alongwith application and it was accepted after examination of the nature of the contract mentioned in the agreement, thus it cannot be said that there was any concealment of fact or misrepresentation on the part of the petitioner. He submitted that the order dated 29th Septembe .....

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that Clause 15 of the compounding scheme, which is annexed as Annexure CA-4, the power to cancel the agreement under the compounding scheme is only with the Commissioner of Trade Tax and not with the Deputy Commissioner (Assessment). Thus, the order passed under Section 7-D of the Act cancelling the earlier order dated 28th February, 2003 is without jurisdiction. He further submitted that once application under the compounding scheme is accepted under Section 7-D of the Act, no assessment can be .....

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ubmitted that the petitioner has misrepresented the authority concerned and has not disclosed the correct nature of the contract, which was not in electrical contract and was not covered under the electrical contract compounding scheme. He submitted that the some of the contract under the agreement was in the nature of electrical contract, namely, TV/Telephone network and was not covered under the compounding scheme and, therefore, the petitioner was not entitled for the benefit of provisions of .....

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d Standing Counsel further submitted that if there is mistake of fact in the agreement, such agreement becomes void and cannot be looked into. In support of his contention he relied on the decision of Apex Court in the case of Sri Tarsem Singh v. Sri Sukhminder Singh, reported in J.T. 1998 (2) SC 149. He further submitted that since order dated 28th February, 2003 was passed by Deputy Commissioner (Assessment) he had power to review its order. 8. We have heard learned Counsel for the parties and .....

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tax which may come into force after the date of such agreement shall have the effect of making a proportionate change in the lump sum or the rate agreed upon in relation to that part of the period of assessment during which the changed rate remains in force. Explanation. - For the purposes of this section the Assessing Authority includes an officer not below the rank of Trade Tax Officer Grade-11 posted at a checkpost." 10. Section 7-D of the Act starts with obstance clause, i.e. "not .....

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in the application/affidavit any fact has been concealed or any wrong details have been furnished, Commissioner of Trade Tax will have a right to cancel the agreement for the lump sum payment and direct for the regular assessment. Apart from this scheme no other compounding scheme has been placed before us. The aforesaid clause 15 of the compounding scheme shows that the power has been given only to Commissioner of Trade Tax to cancel the agreement in case if it is found that in the application .....

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ned, which does not include Deputy Commissioner, therefore, the order passed by Deputy Commissioner (Assessment) is without jurisdiction. Perusal of the notice under Section 7-D of the Act shows that no allegation has been made that the fact has been concealed or any incorrect detail has been furnished. The only allegation in the notice is that some of the work in the agreement was not in the nature of electrical and was of TV/Telephone Network. 11. We are of the opinion that present is not the .....

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. Thus, it is not the case where the nature of contract has not been informed or disclosed for the consideration alongwith application under Section 7-D of the Act. It is also not the case that wrong details have been furnished. If the authority concerned has drawn wrong inferences and committed a mistake in treating the said contract as electrical contract within the ambit of compounding scheme, it is a mistake on the part of officer concerned and it cannot be said that the any fact with regard .....

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cepted. It is settled principle of law that power to review the order cannot be exercised unless it is specifically contemplated in the Act or scheme, no such power has been given to the Deputy Commissioner (Assessment) under the Act or under the scheme. The power under the scheme is given only to the Commissioner of Trade Tax on a specific condition being present namely, in case if, in the application or in the affidavit the fact it concealed or wrong fact has been given. Argument of learned St .....

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