2011 NTN (Vol. 45) - 228 [ALLAHABAD HIGH COURT] TRADE TAX REVISION No. - 317 of 2010 Sapna Steel Gram Smridha, Gwaliar Road, Jhansi vs. Trade Tax Tribunal, U.P.,Lucknow Thru President & Ors. Date of Decision : 4th March, 2011 For the Petitioner : Sh. Abhinav Narayan Trivedi, Advocate For the Respondent : C.S.C. Appeal to Tribunal - When an order of remand be passed - U. P. Trade Tax Act, 1948 Section 10 - Power of remand cannot be exercised by the Tribunal to give a second inning to the revenue to find out fresh defects or to fish out new materials - Remand should only be made for compelling and cogent reasons - A remand cannot be ordered lightly - Tribunal should not ordinarily remand a case merely because it considers the reasoning given by the Divisional Level Committee to be wrong - Such remand orders lead to unnecessary lays delays and cause prejudice to the parties to the case - When all the material is available before it, the Tribunal should exercise its own discretion and decide the appeal - To exercise the power of remand lightly would cause unnecessary delay and prejudices resulting in the denial of justice to the parties - The procedure of remand has utility as long as it is used judiciously with the genuine intention of serving the ends of justice and interest of justice will be defeated if appellate courts start using the power of remand loosely and indiscriminately without application of mind - It is pertinent to add that the honourable object of remand which is to dispense effective justice can be easily deviated from and remand can result in denial of justice if proper caution is not exercised - However, if the power of remand is abused, it can cause great inconvenience to the parties and totally nullify the goals of justice. Cases referred : Hind Vastra Bhandar vs. C.S.T. 23 STC 311 Abid Hasan Watch Company vs. C.S.T. 1995 UPTC 1035 Woodco vs. C.T.T. 2006 NTN Vol. (31) 2002 (Hon ble Rajiv Sharma,J.) JUDGMENT Heard Sri Abhinav Narayan Trivedi, learned Counsel for the revisionist and learned Standing Counsel for the respondents. 2. Through the instant revision under Article 11 of the erstwhile U.P. Trade Tax Act, 1948 and Section 58 of the U.P. Value Added Tax Act, 2008, the revisionist has assailed the order dated 9.9.2010 passed by the Trade Tax Tribunal, U.P., Lucknow in Appeal No. 35 of 2010.
3. Revisionist-M/s Span Steel Gram Smridha installed a new unit for manufacturing Iron Rods and accordingly, applied for issuance of Eligibility Certificate under Section 4-A of the erstwhile U.P. Trade Tax Act 1948 on 5.9.1997, which was rejected ex parte by an order dated 14.3.2000. Subsequently, a review application was filed on 1.5.2000 and that too was rejected by the Divisional Level Committee, vide order dated 15.11.2002, on the following grounds : (i) The flywheel and machinery part cannot be constructed without casting and the Fabricator, namely, M/s Pitamber Engineering Works do not have any facility of casting iron. No mention of flywheels, start switch and moters in the purchase list as it appears that the said unwarranted/unutilized machinery parts were purchased only to veil as Fabrication Work. (iii) The revisionist/applicant has shown that all the fabrication work is done by M/s Pitambar Engineering Works Limited, however, the said firm has no electricity connection. (iv) Since the flywheel, roller and chauka has not been mentioned in the list of machineries/fabricated machines which is accompanied with the application, hence they had a separate voucher for the same. 4. Against the aforesaid orders, the revisionist filed an appeal be fore the Trade Tax Tribunal, Lucknow. The Tribunal, vide order dated 5.6.2004, while allowing the appeal and setting aside the order dated 15.11.2002, remanded the matter for afresh consideration after taking into account the departmental circulars, project report, agreement, certificate of Punjab National Bank and other documents. After remand, the matter remained pending before the Divisional Level Committee for almost five years and ultimately, the Divisional Level Committee rejected the revisionist s claim for exemption of tax under Section 4 (A) of the Act, vide order dated 12.10.2009, on the following grounds : (i) Every time Unit has indicated/raised new issues; There is no co-relation between the first application of the revisionist and subsequent replies. (iii) There is no reason for reversing the findings of the Divisional Level Committee passed on the application of the revisionist, which was passed on the report of the Deputy Commissioner, Trade Tax, Jhansi. (iv) There is no mention of flywheel, roller and chauka although the roller should have been indicated separately as they are part of the rolling. 5. Against the aforesaid order dated 12.10.2009, an appeal was filed and the Tribunal, vide order dated 7.1.2010, while allowing the appeal, setaside the order dated 12.10.2009, inter alia on the ground that directions given by it vide order dated 5.6.2004 have not been complied and
opportunity of hearing has also been denied to the revisionist. The Divisional Level Committee was directed again to reconsider the matter in the light of the observations made therein. Thereafter, the Divisional Level Committee informed the revisionist the next date as 23.1.2010 and as such, the revisionist appeared before the Divisional Level Committee on 23.1.2010 and filed detailed reply/written statement. Thereafter, without issuing any show cause notice or any notice for fixing the hearing of review application, it was informed to the revisionist only on 4.8.2010 that the next date fixed in the matter is 5.8.2010. 6. On 5.8.2010, the revisionist appeared before the Divisional Level Committee, who, vide order dated 5.8.2010, again rejected the revisionist s application on the following grounds : (i) The report of the Chartered Accountant and the certificate of the Punjab National Bank do not mention the word fabrication, therefore, in terms of the Circular dated 28.12.1995 Clause-9, the application is not sustainable. Judgment relied upon in the written statement are not applicable and do not make out a case. (iii) Since it is established that the unit has utilized old machines hence it is not eligible for concession as provided under Section 4-A of the Act 1948, accordingly, the consideration of plant and machineries acquired after the date of admissibility of concession does not arise. 7. Against the aforesaid order dated 5.8.2010, revisionist again filed an appeal and the Tribunal, vide order dated 9.9.2010, while allowing the appeal and setting aside the order dated 5.8.2010, again remanded the matter for afresh consideration. Feeling aggrieved, the revisionist has preferred the instant revision inter alia on the grounds that in spite of thirteen years having elapsed from the date the revisionist preferred review application i.e. 1997 and inspite of the revisionist s unit has been closed w.e.f. 3.11.2004, on the third occasion, the Tribunal remanded the matter for afresh consideration to the Divisional Level Committee instead of deciding the matter finally, so as to end the litigation, which is lingering since 1997. 8. Learned Counsel for the revisionist submits that this Court in the case of M/s Hind Vastra Bhandar vs. Commissioner Sales Tax reported in 23 STC 311, has laid down the principles of remand and the power of remand cannot be exercised according to whims or humour and must be used with circumspection. Subsequently, this Court in the case of Abid Hasan Watch Company vs. Commissioner of Sales Tax reported in 1995 UPTC 1035, while reiterating the principles of remand, held that the power of remand cannot be arbitrarily exercised and the case cannot be remanded in view to enable the revenue to make a fishing and roving inquiry.
9. While relying upon another judgment of this Court in the case of Woodco vs. Commissioner of Trade Tax, U.P., reported in 2006 NTN Vol. (31) 2002, learned Counsel for the revisionist submits that the report cannot be obtained and documents could not be summoned under Rule 75 and the Tribunal should exercise its power to decide the issue instead of remanding the matter. Further, the power of remand cannot be exercised by the Tribunal to give a second inning to the revenue to find out fresh defects or to fish out new materials. He submits that the remand should only be made for compelling and co gent reasons. But the Tribunal erred in law by remanding the revisionist s claim for exemption of tax to the District Level Committee in spite of the fact that earlier the Committee have been granted two opportunities and 13 years have been elapsed but the Committee failed to discharge its onus to prove that the machines installed in the unit have been already used or acquired for use in any other factory or workshop in India. 10. Having considered the submissions of learned Counsel for the parties and perusing the records as well as aforesaid judgments relied by the learned Counsel for the revisionist, I find force in the submission advanced by the Counsel for the revisionist that an order for remand should only be made for compelling and cogent reasons. The Tribunal ought to have considered the fact that remand on earlier two occasions have not yielded any good results. The Tribunal itself has found that the Divisional Level Committee has not even shown respect to the order passed by it. 11. A remand cannot be ordered lightly. The Tribunal should not ordinarily remand a case merely because it considers the reasoning given by the Divisional Level Committee to be wrong. Such remand orders lead to unnecessary lays delays and cause prejudice to the parties to the case. 12. When all the material is available before it, the Tribunal should exercise its own discretion and decide the appeal. To exercise the power of remand lightly would cause unnecessary delay and prejudices resulting in the denial of justice to the parties. Thus, the procedure of remand has utility as long as it is used judiciously with the genuine intention of serving the ends of justice and interest of justice will be defeated if appellate courts start using the power of re mand loosely and indiscriminately without application of mind. 13. It is pertinent to add that the honourable object of remand which is to dispense effective justice can be easily deviated from and remand can result in denial of justice if proper caution is not exercised. However, if the power of remand is abused, it can cause great inconvenience to the parties and totally nullify the goals of justice. 14. In view of the aforesaid discussions, the revision is allowed. The order dated 9.9.2010 passed in appeal No. 35 of 2010 by the Tribunal is
hereby set-aside. The Tribunal is directed to decide Appeal No. 35 of 2010 on merit, in accordance with law and after affording oppor tunity of hearing to the parties. It is expected that the Tribunal will make earnest endeavour to decide the appeal, expeditiously, as the matter is lingering since more than a decade. ---------------------