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M/s Sunita Ispat Pvt. Ltd. Versus The Commissioner, Commercial Tax

2016 (11) TMI 131 - ALLAHABAD HIGH COURT

Quantification of escaped assessment - rejection of the books of accounts - excessive electricity consumption and the same did not appear to be commensurate with the declared quantity of production - Held that: - it is apparent that the rejection of books of accounts of the assessee on this solitary ground cannot be sustained. More importantly this court notices that a reasonable and plausible explanation had been duly proffered by the assessee to explain the irregular electricity consumption. T .....

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Ji Agrawal For the Opposite Party : C.S.C. ORDER Heard Sri Shubham Agrawal, learned counsel for the revisionist and Sri B.K. Pandey, learned Standing Counsel, who has appeared for the respondents. This revision is directed against an order of the Tribunal dated 14 March 2012 in terms of which it has affirmed the rejection of the books of accounts of the assessee. The Tribunal has by the order impugned however, remitted the matter to the assessing authority insofar as quantification of escaped a .....

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s clearly unsustainable in the eyes of law and in light of the principles as laid down by this Court in M/s Speed Rollers Pvt. Ltd. Vs. Commissioner of Trade Tax 2012 UPTC-481 and S/s Saini Timber House Vs. The Commissioner of Trade Tax, U.P. VSTI 2014 (VOL. 21) B-1010 Sri Agrawal submits that insofar as the issue of excess consumption of electricity on merits is concerned, it was the case of the assessee that a huge explosion had taken place in the furnace as a result of which manufacturing ope .....

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ly elucidated by two learned Judges of this Court in M/s Speed Rollers Pvt. Ltd. and S/s Saini Timber House. The underlying principle as elucidated and enunciated in the judgments aforementioned is that irregular consumption of electricity on its own can not form the basis for the rejection of books of accounts of a dealer. To put it in other words, rejection of books of accounts of a dealer cannot be sustained solely on the ground of irregular consumption of electricity. As has been held by thi .....

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court way back in the year 1971 in the case of M/s Mahabir Prasad Jagdish Prasad Vs. The Commissioner of Sales Tax 1971 U.P.T.C.-43 held that the consumption of electricity constitute a good material for initiating proceedings under Section 21 of the U.P. Sales Tax Act but the consumption of electricity alone may not justified for rejecting the accounts particularly when the account books have been accepted during the regular assessment proceedings. 9. In view of the aforesaid authority rejectio .....

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were never accepted earlier. Thus, where account books have been rejected on justifiable material, there is no rider on the power of the assessing authority to make best judgment assessment taking into account the electricity consumption of the assessee as one of the relevant factors. 10. In M/s Chandu Lal & Sons Vs. Commissioner of Sales Tax 1988 U.P.T.C. 535, a Single Judge of this court held that excessive consumption of electricity may not the basis for rejecting the account books but o .....

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