Survey Not Disputed By The Partner Of The Firm Who Was Present - Can't Question Later: Allahabad High Court

The applicant/assessee is in the business of manufacturing and selling rough C.I. Castings. The business premises of the applicant were surveyed on August 18, 2010, where certain exhibits were seized. The books of account as well as an estimation of turnover were made, which was assailed by the Tribunal. The Tribunal has partly allowed the appeal.

At the time of the survey, the estimate of CI casting was not actually weighted or verified, but only on the basis of an estimate or eye measurement. It was recorded as 40 tons. In pursuance of a notice issued under section 45(10) of the VAT Act, specific grounds were raised in the reply to the show cause notice. The issue was also raised before the Assessing Authority, but was unsuccessful up to the Tribunal. Once a specific ground was raised that the estimate of CI casting of 40 tons was made without actual weight, the authorities below were not justified in drawing an adverse inference against the applicant. No specific finding has been recorded by the authorities below.

The department argued that at the time of the survey, one of the partners of the firm was present and on whose statement the weight was recorded. If the surveying officer had arbitrarily recorded more than the amount disclosed by the partner, then it was incumbent upon the partner to state his objection before signing or not signing the survey report.

The only dispute raised by the applicant was that the estimate of 40 tons had wrongly been recorded by the authorities, whereas no actual weighment was made by the surveying authority.

The court while dismissing the revision application, noted that the assessee, himself, had accepted that one of the partners was present at the time of the survey, who himself, on estimation, stated that the stock was for 24-25 tons, but he never requested to correct the stock entries or objected before the surveying authority about noting the same as "40 tons".

"No averment, whatsoever, has been made before the authorities or in the revision that the said partner protested the recording of "40 tons" or any rebuttal to the recording of the said fact of 40 tons was made immediately after the survey was concluded," the court said.

Case Title: M/S. Shree Ram Engineering Works Versus Commissioner Of Commercial Tax U.P. Lucknow

Citation: 2022 LiveLaw (All) 155

Dated: 31.03.2022

Counsel For Appellant: Advocate Suyash Agarwal

Counsel For Respondent: C.S.C.

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