MELTON INDIA versus THE COMMISSIONER TRADE TAX, U.P.

Citation: [2007] 2 S.C.R. 40 · Decided: 31-01-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Judgment (excerpt)

A 
MELTON INDIA 
v. 
THE COMMISSIONER TRADE TAX, U.P. 
JANUARY 31,2007 
B 
(S.B. SINHA AND MARKANDEY KA TJU, JJ.] 
U.P. Trade Tax Act: 
Turnover-Enhancement of, on the ground of suppression-Increased 
C power consumption by assessee's unit-Books of account of assessee showing 
lesser production-Rejection of books of account by courts be/ow-Correctness 
of-Held, correct-Excessive power consumption prima facie establishes 
assessee's intention to suppress the production and turnover. 
D 
The question which arose for consideration in the present appeal is 
whether the Authorities, Tribunal and High Court were right in rejecting 
the books of account of assessee and enhancing the turnover, on the premise 
that the assessee had suppressed its production when there is increase in 
electricity consumption. 
E 
Dismissing the appeal, the Court 
F 
HELD: 1. The High Court is right in saying that excessive power 
consumption, prima facie, establishes the assessee's intention to suppress 
the production and the turnover. (Para 12( (44-8) 
2.1. The assessee's contention that earlier the appellant was 
manufacturing goods of 23 micron which required less electricity 
consumption, whereas subsequently it had started manufacturing goods of 12 
micron which required more electricity consumption, cannot be accepted. It 
may be noted from the orders of the Tribunal and the High Court that the 
assessee's books of accounts have been rejected on several grounds. For 
G example, the assessee had not produced the relevant books showing the 
payment of wages to the workers. This book was very important because had 
it shown that the total wage bill of the unit was going up, it would be a 
reasonable inference to draw that production was also going up. Non-
production of such a book despite several opportunities being given by the 
H 
40 
'f 
-I 
MELTON INDIA v. THECOMMNR. TRADE TAX, U.P. [MARKANDEY KATJU, J.] 
4] 
authorities indicates that the assessee was trying to suppress its production. A 
Similarly, non-production of the production register also leads to the same 
inference. lfara 141144-D-E] 
2.2. There were relevant considerations and relevant material on the 
basis of which the books of the assessee were rejected by Tribunal. The 
Tribunal has given various reasons for upholding the rejection of the assessee B 
books. For example, there was no verification of the raw materials used and 
the work done on job work basis has not been verified. The Tribunal also 
considered the assessee's submission regarding the difference in the 
production of23 microns and 12 microns. The Tribunal has also observed 
that the appellant has nowhere mentioned that the chilling plant has ever C 
remained closed and similar is the position with regard to the supply of 
electricity for labourers. lfara 15] [44-F-G] 
3. The High Court has considered these reasons and has not interfered 
with the findings of the Tribunal about non maintenance of proper accounts 
and suppression of production and turnover. These are findings of fact and D 
hence the High Court, which could only interfere if there was an error of 
law, rightly rejected the revision. IPara 161145-A-BI 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 373 of2007. 
From the Judgment and Final Order dated 10.12.2004 of the High Court E 
of Judicature at Allahabad in T.T.R. Nos. 2407,2408,2409 and 2410/2004. 
Dinesh Dwivedi, Kavin Gulati and T. Mahipal for the Appellant. 
Gaurav Banerjee, Vikrant Yadav and Kamlendra Mishra for the 
Respondent. 
F 
The Judgment of the Court was delivered by 
MARKANDEY KAT JU, J. I. Leave granted. 
2. This appeal has been directed against the judgment and order dated G 
10.12.2004 by the High Court of Judicature at Allahabad in Trade Tax Revision 
Nos. 2407-2410/2004. 
3. Heard learned counsel for the parties and perused the record. 
H 
42 
SUPREME COURT REPORTS 
[2007] 2 S.C.R. 
A 
4. The appellant was doing the business of manufacture of metallised 
plastic films. The appellant's unit was holding an eligibility certificate under 
Section 4-A of the U.P. Trade Tax Act for the period from 20.02.1995 to 
19.02.2003 upto monetary limit of Rs. 66,56,239/-. The Assessing authority 
rejected the appellant's books of account and enhanced the tum over. The 
B first and second appeals filed by the appellant were rejected. 
5. The appellant then filed Revisions before the High Court which were 
also dismissed and hence this appeal. 
The Tribunal has rejected the books of acco

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