# The Commissioner, Commercial Tax, U.P., Lucknow Revisionist v. M/s. Godfrey Phillips India Ltd

- **Citation:** (2024) 2 ILRA 157
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-02-12
- **Case number:** Commercial Tax Revision No. 150 of 2023
- **Bench:** Shekhar B. Saraf
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/the-commissioner-commercial-tax-u-p-lucknow-revisionist-v-m-s-godfrey-phillips-51300
- **Pages:** 15

## Headnote

U.P. Value Added Tax Act, 2008 - Scope of
Revisional Jurisdiction - The revisionist
challenged
the
Tribunal's
order
dated
25.01.2023, which accepted the opposite party's
explanation for a stock discrepancy of 480
cigarette cartons, arguing it was based on
erroneous findings - Held, revisional jurisdiction
under Section 58 is Ltd. to questions of law,
jurisdictional errors, or procedural irregularities,
and the High Court cannot re-examine factual
findings
unless
they
are
perverse
or
unsupported by evidence, as per Hindustan
Petroleum Corporation Ltd. Vs Dilbahar Singh
and Vinod Kumar Tiwari Vs St. of U.P. (Paras 6,
7, 8, 9, 11, 12, 13, 14, 15)

Factual Findings of Tribunal - Binding
Nature - The Tribunal found no stock
discrepancy after accepting the opposite party's
explanation that the surveying authority's count
of 14,338 cartons (against 14,818 in the stock
ledger) was erroneous due to miscounting and
unrecorded old stock - Held, the Tribunal, as
the primary fact-finding body, provided a
reasoned decision based on evidence, and no
perversity or illegality was evident to warrant
interference under revisional jurisdiction. (Paras
2, 4, 14, 15, 16)

Allegation of Clandestine Sales - Lack of
Evidence - The revisionist contended that the
shortage of 480 cartons indicated unrecorded
sales to evade tax post the tax rate increase to
50% on 01.07.2012 - Held, the Tribunal's
finding that the stock was reconciled with the
opposite party's books and supported by Central
Excise records, coupled with no sales occurring
on 01-02.07.2012 due to an ERP system
change, negated the presumption of clandestine
sales, as assumptions alone cannot justify
rejection of account books. (Paras 2, 4, 14, 16)

Central Excise Oversight - Relevance to Tax
Evasion - The opposite party argued that strict
excise
oversight,
with
a
Superintendent
stationed at the premises, made unrecorded
sales implausible - Held, the Tribunal correctly
considered the excise department's control and
158 INDIAN LAW REPORTS ALLAHABAD SERIES
the opposite party's compliance with Rule 10 of
the Central Excise Rules, 2002, in maintaining
daily stock accounts, supporting the absence of
tax evasion and validating the Tribunal's
decision. (Paras 4, 14)

No Question of Law Arises - The revisionist's
attempt to reargue the factual matrix was
impermissible in revisional jurisdiction - Held,
the
Tribunal's
order
was
based
on
a
comprehensive
assessment
of
evidence,
including the opposite party's prompt reporting
of counting errors and excise records, and no
jurisdictional
error
or
perversity
was
demonstrated, leading to the dismissal of the
revision. (Paras 15, 16, 17)

Revision Dismissed - Tribunal's Order
Dated 25.01.2023 Upheld.

List of Cases Cited:

## Text

_Characters 0–39,871 of 51,846. This is a partial read: ask again with offset=39871 for what follows._

2 All. The Commissioner, Commercial Tax, U.P., Lucknow Vs. M/s. Godfrey Phillips India Ltd. 157
requirement of the law where it was meant
to adminiter. Therefore, a writ of certiorari
is warranted in the instant case.

26. Accordingly, let there be a writ of
certiorari issued against the order dated
February
21,
2019
passed
by
the
Respondent No. 2 and the order dated
October 20, 2019 passed by the Respondent
No. 3. The said orders are quashed and set
aside.

27. This Court also directs the
Respondent No. 2 to refund the amount of
tax and penalty deposited by the petitioner,
within a period of four weeks from date.

28. The instant writ petition is
allowed in aforesaid terms. There shall be
no order as to the costs.

29. Urgent photostat-certified copy of
this order, if applied for, should be readily
made available to the parties upon
compliance with requisite formalities.
----------
(2024) 2 ILRA 157
REVISIONAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 12.02.2024

BEFORE

THE HON'BLE SHEKHAR B. SARAF, J.

Commercial Tax Revision No. 150 of 2023

The Commissioner, Commercial Tax, U.P.,
Lucknow ...Revisionist
Versus
M/s. Godfrey Phillips India Ltd.
 ...Opposite Party

Counsel for the Revisionist:
Sri Ravi Shanker Pandey, Additional Chief
Standing Counsel
Counsel for the Opposite Party:
Sri Navin Sinha (Senior Advocate), Sri
Raghav Nayar, Ms. Kalpana Sinha

U.P. Value Added Tax Act, 2008 - Scope of
Revisional Jurisdiction - The revisionist
challenged
the
Tribunal's
order
dated
25.01.2023, which accepted the opposite party's
explanation for a stock discrepancy of 480
cigarette cartons, arguing it was based on
erroneous findings - Held, revisional jurisdiction
under Section 58 is Ltd. to questions of law,
jurisdictional errors, or procedural irregularities,
and the High Court cannot re-examine factual
findings
unless
they
are
perverse
or
unsupported by evidence, as per Hindustan
Petroleum Corporation Ltd. Vs Dilbahar Singh
and Vinod Kumar Tiwari Vs St. of U.P. (Paras 6,
7, 8, 9, 11, 12, 13, 14, 15)

Factual Findings of Tribunal - Binding
Nature - The Tribunal found no stock
discrepancy after accepting the opposite party's
explanation that the surveying authority's count
of 14,338 cartons (against 14,818 in the stock
ledger) was erroneous due to miscounting and
unrecorded old stock - Held, the Tribunal, as
the primary fact-finding body, provided a
reasoned decision based on evidence, and no
perversity or illegality was evident to warrant
interference under revisional jurisdiction. (Paras
2, 4, 14, 15, 16)

Allegation of Clandestine Sales - Lack of
Evidence - The revisionist contended that the
shortage of 480 cartons indicated unrecorded
sales to evade tax post the tax rate increase to
50% on 01.07.2012 - Held, the Tribunal's
finding that the stock was reconciled with the
opposite party's books and supported by Central
Excise records, coupled with no sales occurring
on 01-02.07.2012 due to an ERP system
change, negated the presumption of clandestine
sales, as assumptions alone cannot justify
rejection of account books. (Paras 2, 4, 14, 16)

Central Excise Oversight - Relevance to Tax
Evasion - The opposite party argued that strict
excise
oversight,
with
a
Superintendent
stationed at the premises, made unrecorded
sales implausible - Held, the Tribunal correctly
considered the excise department's control and
158 INDIAN LAW REPORTS ALLAHABAD SERIES
the opposite party's compliance with Rule 10 of
the Central Excise Rules, 2002, in maintaining
daily stock accounts, supporting the absence of
tax evasion and validating the Tribunal's
decision. (Paras 4, 14)

No Question of Law Arises - The revisionist's
attempt to reargue the factual matrix was
impermissible in revisional jurisdiction - Held,
the
Tribunal's
order
was
based
on
a
comprehensive
assessment
of
evidence,
including the opposite party's prompt reporting
of counting errors and excise records, and no
jurisdictional
error
or
perversity
was
demonstrated, leading to the dismissal of the
revision. (Paras 15, 16, 17)

Revision Dismissed - Tribunal's Order
Dated 25.01.2023 Upheld.

List of Cases Cited:

1. Hindustan Petroleum Corporation Ltd. Vs
Dilbahar Singh, (2014) 9 SCC 78

2. Vinod Kumar Tiwari Vs St. of U.P.,
MANU/UP/0455/2015

3. Mohd. Inam Vs Sanjay Kumar Singhal,
MANU/SC/0497/2020

4. M/s Sugar Mills Vs U.O.I., 1989(2) ELT (J172)

5. St. of Kerala Vs M.M. Mathew, 1978 STC 348

6.
Sri
Raja
Lakshmi
Dyeing
Works
Vs
Rangaswamy Chettiar, (1980) 4 SCC 259

7. Dattonpant Gopalvarao Devakate Vs Vithalrao
Maruthirao Janagaval, (1975) 2 SCC 246

8. Ram Dass Vs Ishwar Chander, (1988) 3 SCC
131

9. St. of Kerala Vs K.M. Charia Abdullah & Co.,
(1965) 1 SCR 601

(Delivered by Hon'ble Shekhar B. Saraf, J.)

1. This is a revision petition under
Section 58 of the Uttar Pradesh Value
Added Tax Act, 2008 (hereinafter referred
to as the 'UPVAT Act, 2008') preferred by
The Commissioner, Commercial Tax, U.P.,
Lucknow (hereinafter referred to as the
'Revisionist') against the impugned order
dated January 25, 2023, passed by the
Commercial Tax Tribunal. The Opposite
Party in the instant revision application is
M/S Godfrey Philips India Ltd.

FACTS

2. The factual matrix of the instant lis
has been delineated below:

a. Opposite Party is in the
business of manufacture and sale of
cigarettes, tea leaves, pan masala, and other
different items. For the Assessment Year
2012 - 13, as per the Revisionist, the
Opposite Party had admitted a purchase
turnover and stock transfer of goods to the
tune of INR 3,21,65,65,914/- and sale
turnover inside U.P. to the extent of INR
1,99,27,81,937/- and admitted a tax liability
of INR 62,53,93,015/-.

b. A survey was conducted by the
S.I.B., Ghaziabad, on the production unit of
the Opposite Party on February 2, 2012,
and at the time of survey, 14,338 cartons
containing 17,04,84,000 cigarettes were
found whereas in the books of account
stock of 14,818 cartons were found as
recorded according to the Revisionist.
Accordingly, a total sum of 480 cartons
were found less on physical verification.

c. Since, the rate of tax on
cigarette was enhanced to 50% from July 1,
2012, the assessing authority took the view
that 480 cartons were sold on July 1, 2012,
and July 2, 2012, and no sale invoices
thereof were issued in order to escape the
actual sales. On this ground, the account
books were rejected and evaded turnover of
cigarette
was
determined
at
INR
2 All. The Commissioner, Commercial Tax, U.P., Lucknow Vs. M/s. Godfrey Phillips India Ltd. 159
6,00,00,000/- beside evaded purchases of
tobacco paper and packing material was
determined at INR 2,55,00,000/-. The
evaded sale of cigar was determined at INR
58,261 and an additional liability was
created
of
INR
78,75,000/-
+
INR
75,00,000/ - = INR 1,53,75,000/- on sales,
and a tax liability on purchases at INR
29,75,000/- and on sale of cigar at INR
29,131/-.

d. Aggrieved by the order dated
December 3, 2015, passed by the assessing
authority, the Opposite Party preferred first
appeal
before
the
Additional
Commissioner, Grade - 2 (Appeal) -1st,
Ghaziabad. The first appellate authority
vide its order dated March 8, 2016, rejected
the reconciliation figures submitted by the
Opposite Party and upheld the order passed
by the assessing authority. Being aggrieved
by the order dated March 8, 2016, passed
by the first appellate authority, the Opposite
Party preferred second appeal before the
Commercial Tax Tribunal, Bench - I,
Ghaziabad. The second appellate authority
vide its order dated January 25, 2023,
accepted the contention of the Opposite
Party that there was no difference in the
stock of the cigarettes and the stock found
was in accordance with the stock ledger.
The second appellate authority further held
that the surveying authority had committed
fault in counting the cartons. Accordingly,
the second appeal filed by the Opposite
Party was allowed and the account books
were accepted by the second appellate
authority.

e. The Revisionist filed the
instant revision application under Section
58 of the UPVAT Act, 2008 against the
impugned order dated January 25, 2023,
passed by the second appellate authority.

CONTENTIONS
OF
THE
REVISIONIST

3. Mr. Ravi Shankar Pandey, learned
Additional
Chief
Standing
Counsel
appearing on behalf of the Revisionist has
advanced the following submissions:

(i) The second appellate authority
was not legally justified in accepting the
contention of the Opposite Party that the
surveying authority committed error in
counting the stock which resulted in noting
shortage of 480 cartons.

(ii) At the time of survey dated
July 2, 2012, the counting of stock was
conducted in the presence of Sri Pankaj
Pataudi,
Deputy
General
Manager
(Accounts)
who
never
objected
that
physical counting was done wrongly. The
surveying authority on counting found
14,338 cartons of cigarettes instead of
14,818 cartons entered in the stock register.
As such, a shortage of 480 cartons was
found and the assessing authority rightly
presumed that the same has been sold out
of books as from July 1, 2012, the rate of
tax was enhanced to 50%. The conclusion
drawn by the assessing authority was based
on a reasonable ground which has been
completely ignored by the second appellate
authority.

(iii) After survey dated July 2,
2012,
the
subsequent
intimation
by
correspondence dated July 6, 2012, to the
assessing authority was an attempt to cover
the short comings found by the surveying
authority. A reasonable explanation for
tallying the shortage found at the time of
survey dated July 2, 2012, was required to
be furnished but the same was no
reconciled by the Opposite Party. Instead,
the Opposite Party tried to give a
roundabout explanation by mentioning that
the stock of FSS Vally + FSS ND brand
cigarette was 2,188 boxes but the same was
counted as 2,376 boxes as the difference of
188 boxed was counted twice, Further, the
160 INDIAN LAW REPORTS ALLAHABAD SERIES
stock of FSSPL Brand of cigarette was of
2,775 boxed which was counted as 2,402
boxes and by mistake 83 boxed were
counted twice. Besides, there were 456
boxes of old cigarettes that were kept in the
godown which was not recorded by the
surveying authority. The second appellate
authority accepted the said explanation
furnished by the Opposite Party without
applying its mind and reached a conclusion
that the differences have been reconciled
and no difference was found in the stock of
cigarettes.

(iv)
The
second
appellate
authority further committed a factual
mistake in observing that the goods are
excisable commodity which is checked by
the Excise Department from time to time
and sales are regulated and controlled by
the Superintendent/Inspector of Excise
Department and therefore the evaded sale is
not possible. The non-vigilance of excise
authorities could not be ruled out in view of
the fact that the stock verification was
conducted by the S.I.B. Unit of the
Commercial Department in the presence of
a responsible person of the rank of Deputy
General Manager (Accounts) and no
discrepancy was pointed out at the time of
conducting and recording the factual
position in the survey note.

(v)
The
second
appellate
authority wrongly relied on the decisions
given in M/s Sugar Mills -v- Union of India
reported in 1989(2) ELT (J-172) and State
of Kerala -v- M.M. Mathew reported in
1978 STC 348 in which a principle has
been laid down that account books could
not be rejected on suspicion, strange
coincidences and grave doubts or on
presumptions. It may be submitted that the
account books have been rejected on a solid
and valid ground as shortage of 480 cartons
of cigarette was found and no valid and
reasonable explanation could be put forth
by the dealer at the time of survey
conducted.

CONTENTIONS
OF
THE
OPPOSITE PARTY

4. Mr. Navin Sinha, learned Senior
Advocate assisted by Mr. Raghav Nayar,
learned counsel appearing on behalf of the
Opposite Party has advanced the following
submissions:

(i)
For
the
purposes
of
undertaking the aforesaid manufacturing
activities, the Opposite Party supplies
various raw materials to M/s International
Tobacco Company Limited (hereinafter
referred
to
as
'INTCO').
INTCO
manufactures cigarettes with the use of
such raw material for and on behalf of the
Opposite
Party
under
job
work
arrangement. The title of finished goods
vests with the Opposite Party always till
such goods are sold by it in the course of
trade. The Opposite Party from time to time
sells / stock transfer such goods from the
registered premises on their own account
and duly account such sales / stock transfer
in its books of accounts. Besides, INTCO
also maintains various statutory records as
required under the central excise provisions
to account finished goods as manufactured
by it for and on behalf of the Opposite
Party. In particular, daily stock account is
maintained by it to account production and
removal of finished goods on daily basis.
The disposal of finished stock from the
registered premises is accounted in the
books of the Opposite Party as sales / stock
transfer and in statutory records maintained
by INTCO as removals. In other words,
entries in the Opposite Party's books of
accounts towards sale / stock transfer of
finished stock are mandatorily always
2 All. The Commissioner, Commercial Tax, U.P., Lucknow Vs. M/s. Godfrey Phillips India Ltd. 161
supported by the corresponding entry in the
records of INTCO.

(ii) M/s INTCO is the wholly
owned subsidiary company of the Opposite
Party, which manufactures cigarettes on
behalf of the Opposite Party in the same
premises i.e. 'Meerut Road, Ghaziabad'.
However, the records of the Opposite Party
and INTCO are separately maintained.

(iii)
The
SIB
authorities
conducted the survey of the Opposite
Party's business premises on July 2, 2012,
at 4:30 p.m. and finished counting the stock
of cigarettes available in the premises by
6:00 p.m. Meanwhile, the Opposite Party
was also required by the SIB authorities to
produce their books of accounts, and
particularly the stock statement of finished
goods as on the said date.

(iv) The Opposite Party produced
the required stock statement giving details
of finished stock as on the said date as per
their books of accounts. As per the stock
statement produced by the Opposite Party,
the stock of finished cigarettes was 14,818
cartons categorized into different brands of
cigarettes.

(v) The SIB authorities thereafter
proceeded to count the stock of finished
goods in haphazard manner and without
being accompanied by the concerned
personnel of the Opposite Party. On
completing the counting process, the SIB
authorities prepared brand-wise statement
of stock allegedly found available in their
premises during the survey showing total
stock as 14,323 cartons.

(vi) Since there was difference
between the stock of finished stock as per
inventory taken by the SIB authorities and
stock as per books of accounts, the
Opposite Party immediately pointed out the
reasons of such difference and requested
the authorities to re-count the stock.
However, the SIB authorities, being highly
adamant and non-cooperative, refused to
consider the errors pointed out by the
Opposite Party. At the same time, the
Opposite Party was asked to report such
errors, if any, to their office within 24 hours
i.e. within July 3, 2012.

(vii)
In
line
with
the
understanding
reached
with
the
SIB
authorities, the Opposite Party submitted
detailed representation to the Assistant
Commissioner (SIB), Ghaziabad vide its
letter dated July 3, 2012, detailing the
brand-wise stock of cigarettes available in
its factory duly highlighting the cases of
disagreement
and
reasons
of
such
disagreement.
The
Opposite
Party
specifically requested the SIB authorities
vide the said letter to re-verify the stock in
its premises. The Opposite Party further
submitted on its own motion, a detailed
representation vide letter dated July 2,
2012,
to
the
jurisdictional
Deputy
Commissioner
giving
details
of
the
deficiencies found by them in the survey
diary dated July 2, 2012. The Opposite
Party subsequently received notice from the
Deputy Commissioner (SIB), Commercial
Tax vide their letter no. 68 dated July 18,
2012, requiring the Opposite Party to
produce relevant records in connection with
the survey conducted by them on July 2,
2012. Based on the aforesaid notice, the
Opposite
Party
submitted
detailed
representation along with relevant records
vide its letter dated August 3, 2012.

(viii) The Opposite Party further
received a notice dated January 1, 2013,
from
the
jurisdictional
Deputy
Commissioner requiring the Opposite Party
to reply in respect of various deficiencies
allegedly noticed by the SIB authorities
during their survey conducted on July 2,
2012. In particular, the Opposite Party was
asked to explain as to the reasons for
shortage found during such survey in
162 INDIAN LAW REPORTS ALLAHABAD SERIES
finished stock to the tune of 480 cartons. In
response thereto, the Opposite Party
submitted its submissions, vide its letter
dated January 28, 2013, explaining the
correct factual position. However, the
Deputy Commissioner, Commercial Tax
directed the Assistant Commissioner to
conduct the re-verification. However, the
authorities neither conducted re-verification
of finished stock as requested by the
Opposite Party, nor did they consider or
discuss any of the evidence furnished by
the Opposite Party to rebut the veracity of
survey diary dated July 2, 2012, and
accordingly passed the assessment order
dated December 3, 2015. The Assessing
Authority assessed the evaded purchase of
INR 2,55,00,000/- and Tax at INR
29,75,000/- and evaded sales of INR
6,00,00,000/- and tax thereon at INR
1,53,75,000/-
only
on
the
basis
of
presumption and assumption which is
wrong and illegal.

(ix) The goods manufactured by
the Opposite Party are excisable goods and
there is strict control of excise department.
The excise authorities have deputed a
Superintendent, Central Excise, Ghaziabad
within the factory premises to physically
supervise the clearances of the goods
manufactured. No goods can be removed
without payment of excise duty. When the
removal of goods is not possible without
paying the excise duty, there is no question
of removal of goods out of the books of
accounts. This view has been held in
numerous cases by different courts. The
Assessing Authority has not pointed out
any defect in books of accounts. In the
absence of specific defect in the books of
accounts and any suppression, there was no
justification for rejection of the disclosed
turnover in monthly return.

(x) There was no sale affected
from any location of the Opposite Party on
July 1, 2012, and July 2, 2012. The reason
behind this was that the Opposite Party was
in the process
of
implementing
an
integrated
system
for
production
&
dispatches in place of the existing system
of production & dispatches and accordingly
an intimation to that effect was given to the
Deputy Commissioner, Commercial Tax,
Ghaziabad vide letter dated June 26, 2012,
and thereafter vide letter dated July 2,
2012.

(xi) The Assessing Authority has
wrongly determined the turnover on
estimated basis on the ground of survey
dated July 2, 2012. There is no difference
in the stock of cigarettes on July 2, 2012.
The stock of cigarette was taken by the
surveying authority for 14,323 cartons and
further affirmed by the Assessing Authority
to 14,338 cartons in provisional order. The
stock of cigarettes is accounted for in the
regular books of accounts.

(xii) The error that occurred while
counting the stocks was pointed out to the
authorities at the time of the survey itself
and in response thereto, the Opposite Party
was told to report such error within 24
hours to the SIB authorities. Accordingly,
the correct status was duly reported to AC
(SIB) vide letter dated July 3, 2012, within
24 hours of the said survey with specific
request for re-verification of stocks. Further
the said status was also intimated to the
Assessing Authority vide letter dated July
6, 2012. However, none of the authorities
felt necessary to re-verify the stock of
finished goods in the premises of the
Opposite Party. The stock status furnished
by the Opposite Party to the SIB authorities
during their visit in its premises on July 2,
2012,
is
duly
reconciled
with
the
corresponding stock status as per the Daily
Stock Account being maintained by M/s
INTCO in terms of Central Excise Rules,
2002.
2 All. The Commissioner, Commercial Tax, U.P., Lucknow Vs. M/s. Godfrey Phillips India Ltd. 163

(xiii) In terms of the Rule 10 of
the Central Excise Rules, 2002, the
manufacturer is statutorily required to
maintain daily stock account on daily basis
containing details of finished goods such as
(a) Opening Balance, (b) Manufactured
during the day, (c) Removed on payment of
duty or otherwise, and (d) Closing balance.
Under the central excise law, any difference
in actual stock vis a vis stock as per Daily
Stock Account can be considered as
clandestinely removed by the manufacturer
without payment of duty and has serious
consequences.
Significantly,
there
is
absolutely no allegation from the excise
authorities as to the alleged difference in
actual stock vis a vis stock as per Daily
Stock Account, which undisputedly proves
that the stock counted by the SBI
authorities during their visit on July 2,
2012, was improper and therefore cannot
be relied upon for the present purpose.

(xiv) It is pertinent to mention
here that the stock of finished goods is
controlled by the Opposite Party by
assigning consecutive serial nos. to each
carton. The Opposite Party, as a matter of
its practice, religiously mentions such
assigned number on the removal documents
such as excise gate pass and stock transfer
challan to have complete account of the
quantity
manufactured
and
quantity
removed/cleared.

(xv) The Opposite Party has not
made any dispatches / sales during the
period June 29, 2012, to July 2, 2012, due
to implementation of ERP system change
over. This position is not only evident from
the books of accounts / sale documents of
the Opposite Party but is also supported
from the fact that it had duly intimated the
central excise authorities as well as VAT
authorities about the discontinuation of
removal / sales during such period.
Considering the position that central excise
authorities remain stationed within the
premises of the Opposite Party on 24x7
basis and all removals of finished goods are
affected only after written authorisation by
such authorities, the allegation made in the
impugned order that the Opposite Party has
sold the short found stocks during the
period July 1, 2012 to July 2, 2012 without
accounting in their books is unfounded and
cannot
be
accepted
under
any
circumstances.
The
Central
Excise
personnel are deputed at the Opposite
Party's premises to check the excisable
goods before the removal from the
Opposite Party's factory as per Rule 6 and
Rule 11 of the Central Excise Rules.

(xvi)
The
First
Appellate
Authority allowed the benefit of nonsellable 456 boxes lying at other location
not
marked
with
the
mandatory
requirement of the
"specified
health
warning" on the retail packages containing
tobacco products. The first appellate
authority however erred in holding the
difference of stock as 581 boxes which was
never alleged either by the SIB authorities
or the assessing authority.

(xvii) The enhancement in the
disclosed turnover of sale & purchase for
INR 8,55,00,000/- is made by the Assessing
Authority on the sole ground of survey
dated July 2, 2012. The stock of cigarettes
as per records was 14,818 cartons but was
wrongly noted by the surveying officer in
diary as 14,323 cartons and further
ascertained by the Assessing Authority to
14,338 cartons vide the impugned order.

(xviii)
No
allegation
of
clandestine removal can be made solely on
the ground of assumptions. To establish a
case
of
clandestine
clearance, it
is
necessary for the department to come up
with substantial evidence which could
satisfy that the activity of clandestine
clearance has taken place. Mere reliance
164 INDIAN LAW REPORTS ALLAHABAD SERIES
upon assumptions and conjecture is not
enough for the establishment of case of
clandestine clearance.

(xix)
The
Commercial
Tax
Tribunal, Ghaziabad has given detailed
findings both factual as well as legal in the
impugned order dated January 25, 2023.

(xx) It is finally submitted that no
question of law arises in the present
revision as the Revisionist itself has
acknowledged the anomalies regarding the
counting of the cartons and cigarettes
thereby proving that physical verification
was not properly conducted.

ANALYSIS AND CONCLUSION

5. I have heard the learned counsel
appearing on behalf of the parties and
perused the material on record.

6. It is settled principle of law that the
Tribunal is the primary body responsible
for fact-finding, and when this Court
exercises its revisionary authority, it does
not re-examine facts already adjudicated
upon by the Tribunal. The revisional
jurisdiction exercised by High Courts is
limited, focusing primarily on jurisdictional
errors,
perversity
and
procedural
irregularities. In a revision petition, the
High
Court
should
abstain
from
undertaking a fresh enquiry into factual
matters already adjudicated by the tribunal,
unless compelling reasons necessitate an
intervention of such a nature by the High
Court.

7. Section 58 of the UPVAT Act, 2008
has been extracted below which delineates
the revisional jurisdiction of the High
Court:

"58. Revision by High Court in
special cases.-(1) Any person aggrieved
by an order made under sub-section (7) or
sub-section (8) of Section 57, other than an
order under sub-section (4) of that section
summarily disposing of the appeal, may,
within ninety days from the date of service
of such order, apply to the High Court for
revision of such order on the ground that
the case involves any question of law.

(2) The application for revision
under sub-section (1) shall precisely state
the question of law involved in the case,
and it shall be competent for the High
Court to formulate the question of law or to
allow any other question of law to be
raised.

(3) Where an application under
this section is pending, the High Court may,
on an application in this behalf, stay
recovery of any disputed amount of tax, fee
or penalty payable, or refund of any
amount due under the order sought to be
revised:

Provided that no order for stay or
recovery of such disputed amount shall
remain in force for more than thirty days
unless the applicant furnishes adequate
security to the satisfaction of the Assessing
Authority concerned.

(4) The High Court shall, after
hearing the parties to revision, decide the
question, of law involved therein, and
where as a result of such decision, the
amount of tax, fee or penalty is required to
be determined afresh, the High Court may
send a copy of the decision to the Tribunal
for fresh determination of the amount, and
the Tribunal shall thereupon pass such
orders as are necessary to dispose of the
case in conformity with the said decision.

(5)
All
applications
for
revision of orders passed under Section
57 in appeals arising out of the same
cause of action in respect of an
assessment year shall be heard and
decided together:
2 All. The Commissioner, Commercial Tax, U.P., Lucknow Vs. M/s. Godfrey Phillips India Ltd. 165

Provided that where any one or
more of such applications have been heard
and decided earlier, if the High Court,
while hearing the remaining applications,
considers that the earlier decision may be a
legal impediment in giving relief in such
remaining applications, it may recall such
earlier decision and may thereafter proceed
to hear and decide all the applications
together.

(6) The provisions of Section 5 of
the Limitation Act, 1963, shall mutatis
mutandis, apply to every application, for
revision under this section.

Explanation.-For the purpose of
this section, the expression "any person"
includes the Commissioner and the State
Government."

8.

In
Hindustan
Petroleum
Corporation Limited v. Dilbahar Singh
reported
in
(2014)
9
SCC
78,
a
Constitution
Bench
of
the
Hon'ble
Supreme Court of India elucidated the
ambit of revisional jurisdiction as follows:

"31. We are in full agreement
with the view expressed in Sri Raja
Lakshmi Dyeing Works [Sri Raja Lakshmi
Dyeing Works v. Rangaswamy Chettiar,
(1980) 4 SCC 259] that where both
expressions "appeal" and "revision" are
employed in a statute, obviously, the
expression "revision" is meant to convey
the idea of a much narrower jurisdiction
than that conveyed by the expression
"appeal". The use of two expressions
"appeal" and "revision" when used in one
statute conferring appellate power and
revisional power, we think, is not without
purpose
and
significance.
Ordinarily,
appellate jurisdiction involves a rehearing
while it is not so in the case of revisional
jurisdiction when the same statute provides
the remedy by way of an "appeal" and so
also of a "revision". If that were so, the
revisional power would become coextensive
with that of the trial court or the
subordinate tribunal which is never the
case. The classic statement in Dattonpant
[Dattonpant
Gopalvarao
Devakate
v.
Vithalrao Maruthirao Janagaval, (1975) 2
SCC 246] that revisional power under the
Rent Control Act may not be as narrow as
the revisional power under Section 115 of
the Code but, at the same time, it is not
wide enough to make the High Court a
second court of first appeal, commends to
us and we approve the same. We are of the
view that in the garb of revisional
jurisdiction under the above three rent
control statutes, the High Court is not
conferred a status of second court of first
appeal and the High Court should not
enlarge the scope of revisional jurisdiction
to that extent.

32. Insofar as the three-Judge
Bench decision of this Court in Ram Dass
[Ram Dass v. Ishwar Chander, (1988) 3
SCC 131] is concerned, it rightly observes
that revisional power is subject to wellknown limitations inherent in all the
revisional jurisdictions and the matter
essentially turns on the language of the
statute investing the jurisdiction. We do not
think that there can ever be objection to the
above statement. The controversy centres
round the following observation in Ram
Dass [Ram Dass v. Ishwar Chander, (1988)
3 SCC 131] , "... that jurisdiction enables
the court of revision, in appropriate cases,
to examine the correctness of the findings
of facts also...." It is suggested that by
observing so, the three-Judge Bench in
Ram Dass [Ram Dass v. Ishwar Chander,
(1988) 3 SCC 131] has enabled the High
Court to interfere with the findings of fact
by reappreciating the evidence. We do not
think that the three-Judge Bench has gone
to that extent in Ram Dass [Ram Dass v.
166 INDIAN LAW REPORTS ALLAHABAD SERIES
Ishwar Chander, (1988) 3 SCC 131] . The
observation in Ram Dass [Ram Dass v.
Ishwar Chander, (1988) 3 SCC 131] that as
the expression used conferring revisional
jurisdiction is "legality and propriety", the
High
Court
has
wider
jurisdiction
obviously means that the power of revision
vested in the High Court in the statute is
wider than the power conferred on it under
Section 115 of the Code of Civil Procedure;
it is not confined to the jurisdictional error
alone. However, in dealing with the
findings of fact, the examination of findings
of fact by the High Court is limited to
satisfy itself that the decision is "according
to law". This is expressly stated in Ram
Dass [Ram Dass v. Ishwar Chander, (1988)
3 SCC 131] . Whether or not a finding of
fact
recorded
by
the
subordinate
court/tribunal is according to law, is
required to be seen on the touchstone
whether such finding of fact is based on
some legal evidence or it suffers from any
illegality like misreading of the evidence or
overlooking and ignoring the material
evidence
altogether
or
suffers
from
perversity or any such illegality or such
finding has resulted in gross miscarriage of
justice. Ram Dass [Ram Dass v. Ishwar
Chander, (1988) 3 SCC 131] does not lay
down as a proposition of law that the
revisional power of the High Court under
the Rent Control Act is as wide as that of
the appellate court or the appellate
authority or such power is coextensive with
that of the appellate authority or that the
concluded finding of fact recorded by the
original
authority
or
the
appellate
authority can be interfered with by the High
Court by reappreciating evidence because
Revisional
Court/authority
is
not
in
agreement with the finding of fact recorded
by the court/authority below. Ram Dass
[Ram Dass v. Ishwar Chander, (1988) 3
SCC 131] does not exposit that the
revisional power conferred upon the High
Court is as wide as an appellate power to
reappraise or reassess the evidence for
coming to a different finding contrary to the
finding recorded by the court/authority
below. Rather, it emphasises that while
examining the correctness of findings of
fact, the Revisional Court is not the second
court of first appeal. Ram Dass [Ram Dass
v. Ishwar Chander, (1988) 3 SCC 131] does
not cross the limits of Revisional Court as
explained
in
Dattonpant
[Dattonpant
Gopalvarao
Devakate
v.
Vithalrao
Maruthirao Janagaval, (1975) 2 SCC 246]
."

9. In Vinod Kumar Tiwari v. State
of
U.P.
and
others
reported
in
MANU/UP/0455/2015, this Court outlined
the difference between "appeal" and
"revision" and marked the boundaries
within which revisional jurisdiction is to be
exercised. Relevant paragraphs have been
extracted below:

"11. In the case of State of Kerala
v.
K.M.
Charia
Abdullah
&
Co.,
MANU/SC/0265/1964 : (1965) 1 SCR 601 :
AIR 1965 SC 1585, the Court expressed the
view that when the Legislature confers a
right to appeal in one case and a
discretionary remedy of revision in another,
it may be deemed to have created two
jurisdictions different in scope and content.

"Appeal"
and
"revision"
are
expressions of common usage in Indian
statute
and
the
distinction
between
"appellate jurisdiction" and revisional
jurisdiction is well known though not well
defined. Ordinarily, appellate jurisdiction
involves a rehearing, as it were, on law as
well as fact and is invoked by an aggrieved
person. Such jurisdiction may, however, be
limited in some way as, for instance has
been done in the case of second appeal
2 All. The Commissioner, Commercial Tax, U.P., Lucknow Vs. M/s. Godfrey Phillips India Ltd. 167
under the Code of Civil Procedure, and
under some Rent Acts in some States.
Ordinarily, again, revisional jurisdiction is
analogous to a power of superintendence
and may sometimes be exercised even
without its being invoked by a party. The
extent of revisional jurisdiction is defined
by the statute conferring such jurisdiction.
The conferment of revisional jurisdiction is
generally for the purpose of keeping
tribunals subordinate to the revising
Tribunal within the bounds of their
authority to make them act according to
law, according to the procedure established
by law and according to well defined
principles of justice. Revisional jurisdiction
as ordinarily understood with reference to
our statutes is always included in appellate
jurisdiction but not vice versa. These are
general observations. The question of the
extent of appellate or revisional jurisdiction
has to be considered in each case with
reference to the language employed by the
statute. (Vide Sri Raja Lakshmi Dyeing
Works
v.
Rangaswamy
Chettiar,
MANU/SC/0480/1980 : (1980) 4 SCC 259).

12. According to the dictionary
meaning
"appeal"
is
the
judicial
examination of the decision by a higher
Court of the decision of an inferior Court.
Simply stated, appeal is a proceeding by
which the defeated authority approach the
higher authority or Court to have the
decision of a lower authority or Court
reversed. The appeal is thus a removal of a
cause from an inferior Court/authority to a
superior Court/authority for the purpose of
testing the soundness of the decision of the
inferior Court. The appeal is a continuation
of a proceeding.

13. The revisional authority, may
at any time, on its own motion or on the
application of any aggrieved person, call
for and examine the records relating to the
appeal for the purpose of satisfying itself as
to the legality or propriety of such order or
to the regularity of such procedure and may
pass order in respect thereto as it may
deem fit.

14. In order to embark upon an
enquiry to find out the ambit and scope of
the revisional power under Rule 23, extent,
scope, ambit and meaning of the terms
"legality or propriety" and "regularity,
correctness, legality or propriety" will have
to be determined.

15. A Constitution Bench in
Hindustan
Petroleum
Corporation
Limited v. Dilbahar Singh reported in
MANU/SC/0738/2014 : (2014) 9 SCC 78,
was called upon to answer a reference
regarding the scope and ambit of the
revisional powers of the High Court under
various Rent Control Acts. The Supreme
Court had the occasion to determine the
extent, scope and ambit of the meaning of
the terms "legality or propriety" and
"regularity,
correctness,
legality
or
propriety". The Court held as follows:

"29.1. The ordinary meaning of
the word "legality" is lawfulness. It refers
to strict adherence to law, prescription, or
doctrine; the quality of being legal.

29.2. The term "propriety" means
fitness;
appropriateness,
aptitude;
suitability;
appropriateness
to
the
circumstances or condition conformity with
requirement; rules or principle, Tightness,
correctness, justness, accuracy.

29.3. The terms "correctness" and
"propriety" ordinarily convey the same
meaning, that is, something which is legal
and proper. In its ordinary meaning and
substance, "correctness" is compounded of
"legality" and "propriety" and that which is
legal and proper is "correct".

29.4. The expression "regularity"
with reference to an order ordinarily relates
to the procedure being followed in accord
168 INDIAN LAW REPORTS ALLAHABAD SERIES
with the principles of natural justice and
fair play."

16. The Court while explaining
the expressions "appeal" and "revision"
employed in a statute/rule, observed that
the expression "revision" is meant to
convey the idea of a much narrower
jurisdiction than that conveyed in that
expression "appeal". The use of two
expressions "appeal" and "revision" is not
without
purpose
and
significance.
Ordinarily, appellate jurisdiction involves a
rehearing while it is not so in the case of
revisional jurisdiction when the same
statute provides the remedy by way of an
"appeal" and so also of a "revision". If that
were so, the revisional power would
become coextensive with that of the trial
Court or the subordinate tribunal which is
never the case. The revisional power is not
wide enough to make it a second
Court/authority of second appeal. Under
the garb of revisional jurisdiction, the
revisional authority is not conferred a
status of second authority of appeal and the
authority cannot enlarge the scope of
revisional jurisdiction to that extent.

17. In dealing with the finding of
fact, the examination of findings of fact by
the revisional authority is limited to satisfy
itself to the legality and propriety of such
order. Whether or not a finding of fact
recorded by the subordinate authority is
legal or proper, is required to be seen on
the touchstone whether such finding of fact
is based on some legal evidence or it
suffers from any illegality by misreading of
evidence or overlooking and ignoring the
material evidence altogether or suffers
from perversity or any such finding has
resulted in gross miscarriage of justice.