# M/s Polar Industries Limited v. The Assistant Commissioner (S.I.B.) and another

- **Citation:** (2002) 2 ILRA 403
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2002-04-05
- **Case number:** Civil Misc. Writ (Tax) Petition No. 1009 of 2002
- **Bench:** S.K. Sen, C.J. S. Rafat Alam
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-polar-industries-limited-v-the-assistant-commissioner-s-i-b-and-another-39899
- **Pages:** 3

## Headnote

U.P. Trade Tax Act- sub section (3-A) of
Section 13- there is no scope for
retaining such account, register or other
documents seized for a period beyond
thirty days from the completion of all the
proceedings under the Act in respect of
the relevant year in question.

(Held in para 5).

Admittedly, the assessments for the year
1999-2000
in
respect
of
those
documents and books of account, which
are
relevant,
have
already
been
completed and the assessment order has
also been passed on 13.3.2002. The
period of thirty days shall expire on
12.4.2002. In that view of the matter, it
is not open for the respondents to retain
the
said
documents
and
books
of
account seized from the petitioner by
12.4.2002. So far as the assessment for
subsequent period is concerned the
department shall be at liberty to proceed
in accordance with law and it will be
open to the writ petitioner to take all
steps as he may be advised.
INDIAN LAW REPORTS ALLAHABAD SERIES [2002
404

## Text

2 All] M/s Das's Friends Builders P. Ltd. Vs. Dy. Commissioner of Income Tax, Agra & ors. 403

(2) The above total unexplained
investment of Rs.2,86,77,365 in the
Friends apartment, also includes an
unexplained investment of Rs.40,89,856/-
relating to the period of A.Y. 1996-97. In
this case original assessment U/s 143(3)
was completed on 18.12.1998 where the
unexplained investment of Rs.40,89,856/-
has not been considered. Therefore,
unexplained
investment
U/s
69
of
Rs.40,89,856/- relating to the A.Y. 199697 has to be added in the total income.

(3) In view of the above facts I have
reason
to
believe
that
unexplained
investment U/s 69 of Rs.40,89,856/-
relating to the A.Y. has escaped the
assessment.

(4) Issue notice U/s 148(1)"

3. We have perused the reasons
recorded by the Assessing Authority for
initiating the proceedings under Section
147 of the Act and are of the view that the
reasons recorded are relevant for forming
a reasonable belief that the income has
escaped assessment to tax. In that view of
the matter, we do not find any merit in the
contentions of the learned counsel for the
petitioner. The writ petition fails and is
accordingly dismissed and the application
for interim relief is also rejected.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 05.04.2002

BEFORE
THE HON'BLE S.K. SEN, C.J.
THE HON'BLE S. RAFAT ALAM, J.

Civil Misc. Writ (Tax) Petition No. 1009 of
2002

M/s Polar Industries Limited ...Petitioner
Versus
The Assistant Commissioner (S.I.B.) and
another

 ...Respondents

Counsel for the Petitioner:
Sri M. Manglik

Counsel for the Respondents:
Sri S.P. Kesarwani
S.C.

U.P. Trade Tax Act- sub section (3-A) of
Section 13- there is no scope for
retaining such account, register or other
documents seized for a period beyond
thirty days from the completion of all the
proceedings under the Act in respect of
the relevant year in question.

(Held in para 5).

Admittedly, the assessments for the year
1999-2000
in
respect
of
those
documents and books of account, which
are
relevant,
have
already
been
completed and the assessment order has
also been passed on 13.3.2002. The
period of thirty days shall expire on
12.4.2002. In that view of the matter, it
is not open for the respondents to retain
the
said
documents
and
books
of
account seized from the petitioner by
12.4.2002. So far as the assessment for
subsequent period is concerned the
department shall be at liberty to proceed
in accordance with law and it will be
open to the writ petitioner to take all
steps as he may be advised.
INDIAN LAW REPORTS ALLAHABAD SERIES [2002
404
(Delivered by Hon'ble S.K. Sen, C.J.)

1. We have heard Sri M. Manglik,
learned counsel for the petitioner and Sri
S.P. Kesarwani, learned Standing Counsel
for the State-respondents.

2. The contention of the writ
petitioner is that the books of account and
other relevant documents of the writ
petitioner were seized on 24.8.1999 and
ex-parte assessment order was passed.
The writ petitioner is unable to file
application for recalling or review of the
order Under Section 13 of the U.P. Trade
Tax Act for the reason that he cannot
prepare his case without those relevant
documents and books of account.

3. Section 13 of the U.P. Trade Tax
Act provides as under:

"(3) If any officer authorized under
sub-section (2) has reasonable grounds for
believing that any dealer is trying to
evade liability for tax or other dues under
this Act, and that anything necessary for
the purpose of an investigation into his
liability may be found in any account,
register or document, he may seize such
account, register or document as may be
necessary. The Officer shall forthwith
grant a receipt for the same and shall be
bound to return them to the dealer or the
person from whose custody they were
seized, within a period of ninety days
from the date of such seizure, after having
such copies or extracts taken there from
as may be considered-necessary; provided
the dealer or the aforesaid person, gives a
receipt, in writing for the account, register
or document returned to him. The Officer
may,
before
returning
the
account,
register or document, affix his signature
and his official seal at one or more places
thereon, and in such case the dealer or the
aforesaid person will be required to
mention in the receipt given by him, the
number of places where the signature and
seal of such officer have been affixed on
each account, register or document.

(3-A)
Notwithstanding
anything
contained in sub-section (3), the officer
seizing any account, register or other
document under that sub-section may for
reasons to be recorded by him in writing
and with the prior approval of the
Commissioner,
retain
such
account,
register or other document for such
period not extending beyond thirty days
from the completion of all the proceedings
under this Act in respect of the years for
which they are relevant as he deems
necessary."

4. On proper interpretation of subsection (3-A) of Section 13 of the U.P.
Trade
Tax
Act,
as
mentioned
hereinabove, it appears that there is no
scope for retaining such account, register
or other documents seized for a period
beyond thirty days from the completion of
all the proceedings under the Act in
respect of the relevant year in question.

5. Admittedly, the assessments for
the year 1999-2000 in respect of those
documents and books of account, which
are relevant, have already been completed
and the assessment order has also been
passed on 13.3.2002. The period of thirty
days shall expire on 12.4.2002. In that
view of the matter, it is not open for the
respondents to retain the said documents
and books of account after thirty days.
We, accordingly, direct the respondents to
return the documents and books of
account seized from the petitioner by
12.4.2002. So far as the assessment for
2 All] M/s Polar Industries Ltd. Vs. The Assistant Commissioner (S.I.B.) and another
405
subsequent period is concerned the
department shall be at liberty to proceed
in accordance with law and it will be open
to the writ petitioner to take all steps as he
may be advised.

6. With the aforesaid direction, the
writ petition is allowed to the extent
indicated above.

7. The interim application also
stands disposed of accordingly.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 10.4.2002

BEFORE
THE HON'BLE S.K. SEN, C.J.
THE HON'BLE V.M. SAHAI, J.

Civil Misc. Writ Petition No. 1116 of 2002

M/s Classic Rugs Private Ltd.

 ...Petitioner
Versus
Assistant
Commissioner
(Assessment)
Trade Tax, Mathura and another

 ...Respondents

Counsel for the Petitioner:
Sri Manish Goyal

Counsel for the Respondents:
Sri S.P. Kesarwani
S.C.

Sick
Industrial
Companies
(Special
Provisions) Act, 1985- section 22-all
stages of inquiry and other proceedings
before the Board of Industrial and
Financial Reconstruction are over where
winding up proceeding is pending in
Delhi High Court-Section 22 will have no
application in this case.

Held (Para 4)

The fact remains that proceedings for
winding
up
of
the
sick
industrial
company under Section 20 is pending in
Delhi High Court. That itself shows that
all proceedings by way of inquiry or
otherwise
already
concluded
in
the
Board
of
Industrial
and
Financial
Reconstruction. Section 22 of 'The Act'
cannot have any application in present
case.
Case Law Referred-
1. 1991 SC 169
2. 1997 Company cases Vol. 89 P. 600

(Delivered by Hon'ble S.K. Sen, C.J.)

1. Sri Manish Goyal learned
Advocate appears for petitioner and Sri
S.P. Kesarwani learned Standing Counsel
appears for State Respondents.

2. The petitioner company having its
registered office at New Delhi and in
respect of which winding up proceeding is
pending in Delhi High Court, has moved
this writ petition challenging the notice
dated 28.2.2002 directing the petitioner
company to deposit the amount of
Rs.21,34,593.00 as Trade Tax due against
the writ petitioner since 1994-95 to 199697.

3. The contention of Sri Manish
Goyal learned counsel for petitioner is
that there is automatic suspension of the
proceedings under Section 22 of the Sick
Industrial Companies (Special provisions)
Act 1985 (hereinafter referred to as 'The
Act') and as such complying with the said
Section 22, the notice being in the nature
of a distress proceeding, the notice should
be stayed. It is however on record that all
stages of inquiry and other proceedings
before the Board of Industrial and
Financial Reconstruction are over and the
learned counsel for petitioner also can not
dispute that the matter has been sent to the