M/s H.P. Excise an Taxatation Technical Service Agency, Shimla v. DCIT, Shimla

ITA 436/CHANDI/2017 | 2007-2008
Pronouncement Date: 30-11-2017 | Result: Partly Allowed

Appeal Details

RSA Number 43621514 RSA 2017
Assessee PAN ABDFS2990P
Bench Chandigarh
Appeal Number ITA 436/CHANDI/2017
Duration Of Justice 8 month(s) 22 day(s)
Appellant M/s H.P. Excise an Taxatation Technical Service Agency, Shimla
Respondent DCIT, Shimla
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Partly Allowed
Bench Allotted Not Allotted
Tribunal Order Date 30-11-2017
Assessment Year 2007-2008
Appeal Filed On 08-03-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A CHANDIGARH BEFORE SMT. DIVA SINGH JUDICIAL MEMBER AND DR.B.R.R.KUMAR ACCOUNTANT MEMBER ITA NOS. 436 TO 441/CHD/2017 ASSESSMENT YEARS: 2007-08 TO 2011-12 & 2013-14 H.P. EXCISE & TAXATION TECHNICAL VS. DY. CIT SERVICE AGENCY BLOCK NO. 22 CIRCLE SDA COMPLEX KASUMATI SHIMLA SHIMLA ITA NOS. 517 TO 522/CHD/2017 ASSESSMENT YEARS: 2007-08 TO 2011-12 & 2013-14 DY. CIT VS. H.P. EXCISE & TAXATION TECHNICAL CIRCLE SERVICE AGENCY BLOCK NO. 22 SHIMLA SDA COMPLEX KASUMATI SHIMLA PAN NO. ABDFS2990P (ASSESSEE) (RESPONDENT) ASSESSEE BY : SHRI. VISHAL MOHAN REVENUE BY : SHRI. RAVI SARANGAL DATE OF HEARING : 26/09/2017 DATE OF PRONOUNCEMENT : 30/11/2017 ORDER PER BENCH: ALL THE ABOVE APPEALS HAVE BEEN FILED BY THE ASSESS EE AND THE REVENUE AGAINST THE SEPARATE ORDER OF LD. CIT(A)-SHIMLA H. P. 1. (A) ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITA NO. 436/CHD/2017 FOR THE AY 2007-08: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE LD. CIT( A) IS NOT JUSTIFIED IN UPHOLDING THE REOPENING OF THE CASE UNDER SECTION 147 OF THE INCO ME TAX ACT 1961. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED UPHOLDING THE ADDITION OF RS. 64 20 238/- MADE TO THE TAXABLE INCOME OF THE ASSESSEE TREATING THE ALLEGED INCOME OVER EXPENDITURE TO BE THE INCOME OF THE ASSESSEE APPELLANT. FACT OF THE MATER IS THAT THE SURPLUS IF ANY BELONG S TO THE GOVERNMENT AND AS SUCH IS NOT THE INCOME OF THE ASSESSEE APPELLANT. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED IN NOT ADJUDICATING GROUND NO.4. 2 4. THAT THE ORDER OF THE LD. CIT(A) IS BAD IN LAW AND FACTS. (B)REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITA NO. 517/CHD/2017 FOR THE AY 2007- 08: 1. ON THE FACTS AND IN THE CIRCUMSTANCES THE LD. CI T(A) IS NOT JUSTIFIED IN DELETING THE ADDITIONS OF RS. 3137184/- MADE BY A.O. WHICH WAS P AID TO THE GOVT. AS PER THE BYE LAWS OF THE ASSESSEE SOCIETY AND HOLDING THE AS NON TAXA BLE. 2. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE A.O. RESTORED. (C) ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN I TA NO. 437/CHD/2017 FOR THE AY 2008-09: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE LD. CIT( A) IS NOT JUSTIFIED IN UPHOLDING THE REOPENING OF THE CASE UNDER SECTION 147 READ WITH S ECTION 148 OF THE INCOME TAX ACT 1961. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED UPHOLDING THE ADDITION OF RS. 64 05 556/- MADE TO THE TAXABLE IN COME OF THE ASSESSEE TREATING THE ALLEGED INCOME OVER EXPENDITURE TO BE THE INCOME OF THE ASS ESSEE APPELLANT. FACT OF THE MATER IS THAT THE SURPLUS IF ANY BELONGS TO THE GOVERNMENT AND AS SUC H IS NOT THE INCOME OF THE ASSESSEE APPELLANT. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED IN NOT ADJUDICATING GROUND NO.4. 4. THAT THE ORDER OF THE LD. CIT(A) IS BAD IN LAW AND FACTS. (D) REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITA NO. 518/CHD/2017 FOR THE AY 2008-09: 1. ON THE FACTS AND IN THE CIRCUMSTANCES THE LD. CI T(A) IS NOT JUSTIFIED IN DELETING THE ADDITIONS OF RS. 34 92 358/- MADE BY A.O. WHICH WAS PAID TO THE GOVT. AS PER THE BYE LAWS OF THE ASSESSEE SOCIETY AND HOLDING THE AS NON TAXA BLE. 2. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE A.O. RESTORED. (E) ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN IT A NO. 438/CHD/2017 FOR THE AY 2009-10: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE LD. CIT( A) IS NOT JUSTIFIED IN UPHOLDING THE REOPENING OF THE CASE UNDER SECTION 147 READ WITH S ECTION 148 OF THE INCOME TAX ACT 1961. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED UPHOLDING THE ADDITION OF RS. 61 71585/- MADE TO T HE TAXABLE INCOME OF THE ASSESSEE TREATING THE ALLEGED INCOME OVER EXPENDITURE TO BE THE INCOME OF THE ASSESSEE APPELLANT. FACT OF THE MATER IS THAT THE SURPLUS IF ANY BELONG S TO THE GOVERNMENT AND AS SUCH IS NOT THE INCOME OF THE ASSESSEE APPELLANT. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED IN NOT ADJUDICATING GROUND NO.4. 4. THAT THE ORDER OF THE LD. CIT(A) IS BAD IN LAW AND FACTS. (F) REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITA NO. 519/CHD/2017 FOR THE AY 2009-10: 3 1. ON THE FACTS AND IN THE CIRCUMSTANCES THE LD. CI T(A) IS NOT JUSTIFIED IN DELETING THE ADDITIONS OF RS. 36 61 130/- MADE BY A.O. WHICH WAS PAID TO THE GOVT. AS PER THE BYE LAWS OF THE ASSESSEE SOCIETY AND HOLDING THE AS NON TAXA BLE. 2. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE A.O. RESTORED. (G) ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN IT A NO. 439/CHD/2017 FOR THE AY 2010-11: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE LD. CIT( A) IS NOT JUSTIFIED IN UPHOLDING THE REOPENING OF THE CASE UNDER SECTION 147 READ WITH S ECTION 148 OF THE INCOME TAX ACT 1961. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED UPHOLDING THE ADDITION OF RS. 12937365/- MADE TO T HE TAXABLE INCOME OF THE ASSESSEE TREATING THE ALLEGED INCOME OVER EXPENDITURE TO BE THE INCOME OF THE ASSESSEE APPELLANT. FACT OF THE MATER IS THAT THE SURPLUS IF ANY BELONG S TO THE GOVERNMENT AND AS SUCH IS NOT THE INCOME OF THE ASSESSEE APPELLANT. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED IN NOT ADJUDICATING GROUND NO.4. 4. THAT THE ORDER OF THE LD. CIT(A) IS BAD IN LAW AND FACTS. (H) REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITA NO. 520/CHD/2017 FOR THE AY 2010-11: 1. ON THE FACTS AND IN THE CIRCUMSTANCES THE LD. CI T(A) IS NOT JUSTIFIED IN DELETING THE ADDITIONS OF RS. 85 27 214/- MADE BY A.O. WHICH WAS PAID TO THE GOVT. AS PER THE BYE LAWS OF THE ASSESSEE SOCIETY AND HOLDING THE AS NON TAXA BLE. 2. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE A.O. RESTORED. (I) ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN IT A NO. 440/CHD/2017 FOR THE AY 2011-12: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE LD. CIT( A) IS NOT JUSTIFIED IN UPHOLDING THE REOPENING OF THE CASE UNDER SECTION 147 READ WITH S ECTION 148 OF THE INCOME TAX ACT 1961. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED UPHOLDING THE ADDITION OF RS. 23027546/- MADE TO T HE TAXABLE INCOME OF THE ASSESSEE TREATING THE ALLEGED INCOME OVER EXPENDITURE TO BE THE INCOME OF THE ASSESSEE APPELLANT. FACT OF THE MATER IS THAT THE SURPLUS IF ANY BELONG S TO THE GOVERNMENT AND AS SUCH IS NOT THE INCOME OF THE ASSESSEE APPELLANT. 3. THAT THE ORDER OF THE LD. CIT(A) IS BAD IN LAW AND FACTS. (J) REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITA NO. 521/CHD/2017 FOR THE AY 2011-12: 1. ON THE FACTS AND IN THE CIRCUMSTANCES THE LD. CI T(A) IS NOT JUSTIFIED IN DELETING THE ADDITIONS OF RS. 89 42 065/- MADE BY A.O. WHICH WAS PAID TO THE GOVT. AS PER THE BYE LAWS OF THE ASSESSEE SOCIETY AND HOLDING THE AS NON TAXA BLE. 2. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE A.O. RESTORED. 4 (K) ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN IT A NO. 441/CHD/2017 FOR THE AY 2013-14: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED UPHOLDING THE ADDITION OF RS. 40182373/- MADE TO T HE TAXABLE INCOME OF THE ASSESSEE TREATING THE ALLEGED INCOME OVER EXPENDITURE TO BE THE INCOME OF THE ASSESSEE APPELLANT. FACT OF THE MATER IS THAT THE SURPLUS IF ANY BELONG S TO THE GOVERNMENT AND AS SUCH IS NOT THE INCOME OF THE ASSESSEE APPELLANT. 2. THAT THE ORDER OF THE LD. CIT(A) IS BAD IN LAW AND FACTS. (L) REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITA NO. 522/CHD/2017 FOR THE AY 2013-14: 1. ON THE FACTS AND IN THE CIRCUMSTANCES THE LD. CI T(A) IS NOT JUSTIFIED IN DELETING THE ADDITIONS OF RS. 1 11 95 627/- MADE BY A.O. WHICH W AS PAID TO THE GOVT. AS PER THE BYE LAWS OF THE ASSESSEE SOCIETY AND HOLDING THE AS NON TAXABLE. 3. IDENTICAL EFFECTIVE GROUNDS HAVE BEEN RAISED BY THE ASSESSEE AND ALSO BY THE REVENUE IN ALL THEIR APPEALS FOR THE ALL THE ASSESS MENT YEARS 2007-08 TO 2011-12 AND FOR THE ASSESSMENT YEAR 2013-14. 4. SINCE THE ISSUE OF THE INCOME TAXABLE IN ASSESSE E AS WELL AS THE REVENUE APPEALS ARE THE SAME WE ARE TAKING UP ITA NO. 436 /CHD/2017 OF THE ASSESSEE & ITA NO. 517/CHD/2017 OF THE REVENUE AS THE LEAD CASES W HEREIN FOLLOWING GROUNDS HAVE BEEN RAISED : 5. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED UPHOLDING THE ADDITION OF RS. 64 20 238/- MADE TO THE TAXABLE IN COME OF THE ASSESSEE TREATING THE ALLEGED INCOME OVER EXPENDITURE TO BE THE INCOME OF THE ASS ESSEE ASSESSEE. FACT OF THE MATER IS THAT THE SURPLUS IF ANY BELONGS TO THE GOVERNMENT AND AS SUC H IS NOT THE INCOME OF THE ASSESSEE APPELLANT ( ITA NO. 436/CHD/2017 OF THE ASSESSEE) 6. ON THE FACTS AND IN THE CIRCUMSTANCES THE LD. CIT(A ) IS NOT JUSTIFIED IN DELETING THE ADDITIONS OF RS. 31 37 184/- MADE BY A.O. WHICH WAS PAID TO T HE GOVT. AS PER THE BYE LAWS OF THE ASSESSEE SOCIETY AND HOLDING THE AS NON TAXABLE (ITA NO. 517 /CHD/2017 OF THE REVENUE) FURTHER THE ASSESSEE HAS TAKEN THE ISSUE OF REOPENI NG AT GROUND NO. 1 FOR THE ASSESSMENT YEARS 2007-08 TO 2011-12. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE LD. C IT(A) IS NOT JUSTIFIED IN UPHOLDING THE REOPENING OF THE CASE UNDER SECTION 147 OF THE INCOME TAX ACT 1961. 5. FIRSTLY WE SHALL DEAL WITH THE ISSUE OF REOPENIN G FOR THE ASSESSMENT YEARS 2007-08 TO 2011-12 . 5 6. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SOCIETY REGISTERED UNDER THE SOCIETY REGISTRATION ACT 1860 ON 27.08.2002. TH E APPLICATION OF THE ASSESSEE FOR REGISTRATION UNDER SECTION 12AA OF THE INCOME T AX 1961 WAS REJECTED ON 29/11/2013 BY CIT(A) SHIMLA HOLDING THAT THE ACTIV ITIES CARRIED ON BY THE SOCIETY WERE NOT FOR THE BENEFIT OF GENERAL PUBLIC UTILITY BUT WAS FOR PROVIDING INFRASTRUCTURE FACILITIES TO STATE GOVERNMENT (EXCI SE & TAXATION DEPT.). THE ASSESSEE WAS PREPARING INCOME AND EXPENDITURE STATE MENT AND WAS SHOWING THE SURPLUS OF INCOME OVER EXPENDITURE IN ITS RETUR NS. 7. SINCE THE REGISTRATION UNDER SECTION 12AA WAS RE JECTED THE ASSESSING OFFICER ISSUED NOTICE ON 08/01/2014 UNDER SECTION 1 48 R.W.S 147 OF THE INCOME TAX ACT 1961 FOR TAXING THE EXCESS OF INCOME OVER EXPENDITURE OF THE AMOUNT OF RS. 64 20 238/- RS. 64 05 556/ - RS. 61 71 585/- AND RS. 1 29 37 365/- FOR THE ASSESSMENT YEAR 2007-08 2008-09 2009-10 & 2010-11 RESPECTIVELY. THE ASSESSEE HAS FILED OBJECTION TO THE ISSUE OF NOTICE UNDER SE CTION 148 ON 26/10/2014 WHICH HAVE BEEN DULY ADDRESSED BY THE ASSESSING OFFICER O N 17/12/2014. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF THE SOCIETY AND THE GENERATION OF FUNDS TO RUN THE SOCIETY. THE ASSESSEE WAS SUPPLIED WITH COPY OF THE REASONS RECODED FOR RE- OPENING THE CASES. THE ASSESSEE RECASTED THE INCOME AND EXPENDITURE STATEMENTS AND FILED RETURNS AT NIL INCOME BY DEBIT ING THE SURPLUS AS OTHER EXPENSES PAYABLE. 8. FURTHERANCE TO THE PROCEEDINGS THE ASSESSEE RE PLIED ON 21/12/2014 THAT ONLY THE REAL INCOME AS DEFINED UNDER SECTION 2(31) OF THE INCOME TAX ACT 1961 NEEDS TO BE ASSESSED AS LAID DOWN BY THE HONBLE HI GH COURT OF ANDHRA PRADESH 174 ITR 682 AND SINCE NO REAL INCOME HAS A CCRUED TO THE ASSESSEE NO TAXABILITY LIES WITH THE ASSESSEE SOCIETY. 9. THE ASSESSING OFFICER AFTER REBUTTING THE EXPLAN ATION OF THE ASSESSEE HELD THAT THE ASSESSEES INCOME WOULD BE TAXABLE AS THE ASSESSEE HAS NOT GRANTED REGISTRATION UNDER SECTION 12AA AND MADE ADDITION O N THE FOLLOWING TWO GROUNDS. 1. AN AMOUNT OF RS. 64 20 238/- WAS ADDED TO THE INCO ME OF THE ASSESSEE AS THE EXCESS OF INCOME OVER EXPENDITURE. 2. AN AMOUNT OF RS. 31 57 184/- WHICH WAS DEPOSITED WI TH THE TREASURY HOLDING THAT THIS EXPENDITURE WAS NOT RELATED TO TH E BUSINESS ACTIVITY OF THE 6 ASSESSEE BUT ONLY DIVERSION OF THE REAL INCOME OF T HE SOCIETY TO THE STATE GOVERNMENT. 10. BEFORE THE LD. CIT(A) THE ASSESSEE OBJECTED TO ISSUANCE OF SECTION 148 AND CONTESTED THE REOPENING ON THE GROUNDS THAT THE ASSESSEE HAD NO TAXABLE INCOME IN VIEW OF THE CLAUSES LAID DOWN IN THE MEMO RANDUM OF ASSOCIATION OF THE ASSESSEE SOCIETY AND ALSO KEEPING IN VIEW THE F ACT THAT ENTIRE EXCESS OF INCOME OVER THE EXPENDITURE BELONGS TO STATE GOVERN MENT. 11. THE LD. CIT(A) UPHELD THE ACTION OF ASSESSING O FFICER SO FAR AS THE SECTION 148 IS CONCERNED RELYING ON THE JUDGMENT OF APEX CO URT IN CASE OF ITO VS. LAKHMANI MEWAL DASS [1976] 3 SCC 757 AND DECISION O F HIGH COURT OF HP IN THE CASE OF ANKITA DEPOSITS & ADVANCES (P) LTD. VS. CIT [2010] 193 TAXMAN 36 (HP). THE LD. CIT(A) FURTHER HELD THAT THE ASSESSING OFFI CER HAS DULY RECORDED THE REASONS AFTER DUE APPLICATION OF MIND AND COMPLIED WITH ALL THE PROVISIONS OF THE ACT. THE LD. CIT(A) ALSO HELD THAT SINCE THE ASSESS EE HAS SHOWN THE SURPLUS OF INCOME OVER EXPENDITURE IN THE INCOME AND EXPENDITU RE STATEMENT AND THE FACT THAT THE ASSESSEES REGISTRATION UNDER SECTION 12AA HAS BEEN REJECTED BY THE AUTHORITIES THE ASSESSING OFFICER HAD REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT. 12. BEFORE US THE LD. AR ARGUED VEHEMENTLY THAT TH ERE IS NO APPLICATION OF MIND BY THE ASSESSING OFFICER AND RELIED ON THE SUB MISSIONS MADE BEFORE THE LD. CIT(A). 13. THE LD. DR RELIED UPON THE ORDER OF THE LD. CIT (A). 14. WE HAVE PERUSED THE MATTER AND FOUND OUT THAT T HE ASSESSING OFFICER HAS RIGHTLY ISSUED NOTICE UNDER SECTION 148 OWING TO RE JECTION OF REGISTRATION UNDER SECTION 12AA AND BY RECORDING AN APPROPRIATE REASON . THE REASONS WERE ALSO DULY SUPPLIED TO THE ASSESSEE AS PER THE ASSESSEES REQUEST. SINCE THE ACTION OF THE ASSESSING OFFICER IN CONSONANCE WITH THE ACT AN D PROCEDURES WE DECLINE TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) CONFIRMI NG THE ACTION OF ISSUING THE NOTICE UNDER SECTION 148. 15. THE APPEAL OF THE ASSESSEE ON THIS GROUND IS DI SMISSED. 7 16. THE SECOND GROUND RELATES TO THE TAXABILITY OF THE SURPLUS INCOME OVER EXPENDITURE TO BE THE INCOME OF THE ASSESSEE. 17. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER AFTER REBUTTING THE EXPLANATION OF THE ASSESSEE HELD THAT THE ASSES SEES INCOME WOULD BE TAXABLE AS THE ASSESSEE HAS NOT GRANTED REGISTRATIO N UNDER SECTION 12AA AND MADE ADDITION ON THE FOLLOWING TWO GROUNDS. 1. AN AMOUNT OF RS. 64 20 238/- WAS ADDED TO THE INCO ME OF THE ASSESSEE AS THE EXCESS OF INCOME OVER EXPENDITURE. 2. AN AMOUNT OF RS. 31 57 184/- WHICH WAS DEPOSITED WI TH THE TREASURY HOLDING THAT THIS EXPENDITURE WAS NOT RELATED TO TH E BUSINESS ACTIVITY OF THE ASSESSEE BUT ONLY DIVERSION OF THE REAL INCOME OF T HE SOCIETY TO THE STATE GOVERNMENT. 18. AGGRIEVED THE ASSESSEE FILE APPEAL BEFORE THE L D. CIT(A). THE LD. CIT(A) AFTER GOING THROUGH THE ACTIVITIES OF THE ASSESSEE SOCIETY HELD THAT THE 20% AMOUNT OF THE FEE COLLECTED WHICH HAS BEEN PAID UPF RONT TO THE STATE GOVERNMENT BE NOT TREATED AS INCOME OF THE ASSESSEE AS THIS AMOUNT HAS BEEN PAID TO THE STATE TREASURY AND ALSO HELD THAT THE R EMAINING 80% AMOUNT OF THE FEE COLLECTED WHICH PARTOOK THE CHARACTER OF INCOME WHICH THE ASSESSEE HAD THE FREEDOM TO APPLY FOR THE OBJECTIVES OF THE SOCI ETY BE TREATED AS INCOME OF THE ASSESSEE. 19. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A) THE ASSESSEE FILED APPEAL AGAINST THE CONFIRMATION OF THE 80% OF AMOUNT OF TH E FEE COLLECTED BY THE ASSESSEE AND THE REVENUE HAS FILED APPEAL AGAINST T HE DELETION OF THE 20% OF AMOUNT OF FEE COLLECTED. SINCE THE ISSUE INVOLVED I N THE APPEAL OF THE ASSESSEE AND THE REVENUE PERTAINS TO THE TAXABILITY OF THE F EES COLLECTED AND PAID BY THE ASSESSEE TO THE GOVT. TREASURY THE ISSUE IS DEALT I N ITS ENTIRETY. 20. BEFORE US THE LD. AR RELIED ON THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) WHILE THE LD. DR RELIED ON THE ORDER OF THE CIT(A) THE ORDER OF THE ASSESSING OFFICER AND ALSO ARGUED THAT THE AUTHORITIES WHICH WERE CREATED BY THE GOVERNMENT ARE NOT GOVERNMENT AUTHORITIES. IN THAT SENSE HE ARGUED THAT THE ASSESSEE WHICH WAS A CREATION OF THE GOVERNMENT CAN NOT BE TREATED AS GOVERNMENT PERSE. 21. TO DEAL WITH THIS ISSUE THE MEMORANDUM OF ASSO CIATION OF THE SOCIETY THE 8 FUNCTIONS PERFORMED BY THE SOCIETY THE MANAGEMENT THE SOURCES OF REVENUE FOR THE SOCIETY THE EXPENDITURE INCURRED AND HOW THE SURPLUS WAS UTILIZED WHETHER THE SURPLUS WAS TRANSFERRED TO THE GOVERNME NT ACCOUNT OR NOT ARE TO BE EXAMINED IN DETAIL IN ORDER TO DETERMINE WHETHER TH E SURPLUS CAN BE TREATED AS INCOME TAXABLE IN THE HANDS OF THE ASSESSEE OR NOT . 22. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A SOCIETY REGISTERED WITH REGISTRAR OF SOCIETIES VIDE NO. 140/2004 DATED 23/ 08/2004. THE ASSESSEE SOCIETY IS MANNING ALL THE MULTI PURPOSE BARRIERS IN THE ST ATE OF HIMACHAL PRADESH AND IN RESPECT OF ALL GOODS WHICH CROSS THE BARRIER TO COM E INTO HIMACHAL OR WHICH GO OUT OF HIMACHAL THE SAME ARE TO BE DECLARED AT THE MULTI PURPOSE BARRIER AS PER THE PROVISION OF SEC 34 OF THE H.P. VAT ACT 2005 R EAD WITH THE H.P. VAT RULES OF 2005. AGAINST THE SAID DECLARATIONS A FORM BEARING NO. ST XXVI-A IS ISSUED TO THE PERSON DECLARING THE GOODS. TILL THE YEAR 2009 A US ER FEE OF RS.5 PER FORM WAS CHARGED BY THE ASSESSEE SOCIETY AND WHICH WAS ENHAN CED TO RS.10 AS PER THE LETTER DATED 18/05/2009. AS PER THE CLAUSES OF 8.2 OF THE BYE LAWS OF THE MEMORANDUM THE ASSESSEE USED TO DEPOSIT. RS.1 PER D ECLARATION WITH THE STATE TREASURY PRIOR TO 2009 WHICH WAS ENHANCED TO RS.2 P ER DECLARATION AFTER 2009. THE OBJECTS OF THE SOCIETY AS ENUMERATED IN THE M EMORANDUM OF ASSOCIATION ARE REPRODUCED AS UNDER- TO FACILITATE THE GENERAL PUBLIC DEALERS CANYING GO ODS AND CROSSING THE BARRIERS ESTABLISHED BY THE STATE GOVT AND ALSO TO DIFFUSE AWARENESS AMONGST THE GENERAL PUBLIC DEALERS ABOUT THE SALES TAX LAWS. TO UTILIZE THE INFORMATION TECHNOLOGY FOR DEEPER SY STEMATIC REFORMS IN TAX ADMINISTRATION BY CREATION OF A SEPARATE ENTITY PRO PERTY GEARED TO PROVIDE SUPPORTIVE ROLE TO THE DEPARTMENT IN CREATION OF DA TA-BANK (DEALER WISE/COMMODITY WISE CIRCLE WISE AND BARRIER WISE) IN TRANSMISSION OF INFORMATION AND ESTABLISHMENT OF CLIENT SERVER ENVIRONMENT. TO BACK UP THE COMPUTERIZATION REQUIREMENT OF THE D EPARTMENT OF EXCISE AND TAXATION DEPARTMENT AND FOR THIS PURPOSE DEVELOP IN FRASTRUCTURE THEREFORE BOTH IN TERMS OF SOFTWARE AS WELL AS HARDWARE. TO FACILITATE ADOPTION OF STXXVI-A FORM IN A COMPUT ER FRIENDLY FORMAT AND GENERATE FUNDS BY RENDERING THIS SERVICES TO THE DE ALERS SO AS TO MAKE IT IS A SELF SUSTAINING ACTIVITY. TO CARRY OUT ALL SUCH ACTIVITIES AS ARE ENVISAGED I N SECTION 20 OF THE SOCIETY REGISTRATION ACT 1860 WHICH ARE IN THE INTEREST O F SOCIETY. TO DERIVE OPTIMUM BENEFITS FROM FULLY NETWORKED COM PUTERIZATION IN TERMS OF PROVIDING COMPUTERIZED FUNCTIONING OF MULTI-PURPOSE BARRIERS ISSUANCE OF COMPUTERIZED RECEIPTS ON-LINE NETWORKING TO FACILI TATE SHARING OF DATE BETWEEN ALL OFFICERS/ASSESSING AUTHORITIES IN THE DEPARTMEN T AND DEVELOP OTHER RELATED INFRASTRUCTURES INCIDENTAL THERETO. 9 THE SOCIETY SHALL FOR THIS PURPOSE GENERATE RECEIP TS IN LIEU OF PROVIDING THESE SERVICES AT THE MULTI PURPOSES BARRIERS AND UTILIZ E THE SAME TO FULFILL THE OBJECTIVES OF THE SOCIETY. 23. THE DETAILS OF THE BACKGROUND OF THE SOCIETY T HE FUNCTIONAL REQUIREMENT THE OPERATIONAL MODEL THE ACCOUNTING STRUCTURE AND ULTIMATE PAYMENT TO THE EXCHEQUER OF THE GOVERNMENT IS EXAMINED. 24. THE COMPLETE DETAILS OF THE GOVERNING BODY ORG ANIZATIONAL STRUCTURE FUNDS AND OPERATION OF ACCOUNTS ARE ENUMERATED AS UNDER: RULES AND REGULATIONS OF THE SOCIETY EXCISE AND TAXATION TECHNICAL SERVICE AGENCY H.P. 1. SHORT TITLE THESE RULES AND REGULATIONS MAY BE CALLED THE RULES AND REGULATIONS OF THE EXCISE AND TAXATION TECHNICAL SERVICE AGENCY HIMAC HAL PRADESH (HEREINAFTER CALLED THE 'RULES'). 2.INTERPRETATION UNLESS IT IS INCONSISTENT WITH THE SUBJECT OR CONTE XT: THE 'SOCIETY' MEANS THE 'EXCISE AND TAXATION TECHNICAL. SERVICE AGENCY HIMACHAL PRADESH ' 'CORPUS O F FUNDS' MEANS THE AMOUNT GENERATED PURSUANT TO ISSUANCE OF COMPUTERIZED STXXVI-A FORM AT THE BARRIER (S )/SERVICES RENDERED. 'MONTH' MEANS CALENDAR MONTH. 'YEAR MEANS THE PERIOD COMMENCING FROM THE 1 ST APRIL AND ENDING WITH 31 ST MARCH OF THE CALENDAR YEAR. 'IN WRITING' MEANS INCLUDING PRINTING LITHOGRAPHY AND TYPEWRITI NG:- : 'DEPARTMENT' MEANS THE EXCISE & TAXATION DEPARTMENT H.P 3.MEMBERS FOR THE PURPOSE OF REGISTRATION OF THE SOCIETY THE NUMBER MEMBER IS DECLARED TO BE SEVEN BUT THE SOCIETY MAY AT AI TIME INCREASE THE NUMBER. 4.ORGANISATI0NAL STRUCTURE THE SOCIETY SHALL HAVE TWO TIER STRUCTURE AS UNDER: I) GOVERNING BODY. II) EXECUTIVE COMMITTEE. 5.GOVERNING BODY THE GOVERNING BODY SHALL CONSISTS OF THE FOLLOWING SEVEN MEMBERS INCLUDING THE CHAIRMAN AND THE MEMBER SECRETARY: 1. PRINCIPAL SECRETARY EXCISE AND TAXATION H.P. GOVT. CHAIRMAN 2. SECRETARY(FIN.) /DIRECTOR PUBLIC ENTERPRISES AND INSTITUTIONAL FINANCE H.P.GOVT. MEMBER 10 3. COMMISSIONER EXCISE &TAXATION H.P. MEMBER 4. MANAGING DIRECTOR ELECTRONIC DEV. CORPORATION H.P. MEMBER 5. TECHNICAL DIRECTOR/ PRINCIPAL SYSTEM ANALYST NATIONAL INFORMATICS CENTRE. HP SHIMLA-2. ME MBER 6. ADDITIONAL COMMISSIONER EXCISE & TAXATION (HQR) MEMBER 7 DY. CONTROLLER(F&A) EXCISE & TAXATION DEPARTMENT H.P. MEMBER- SECY. 1. ALL THE ABOVE OFFICIAL MEMBERS SHALL BE THE EX-O FFICIO MEMBERS OF THE GOVERNING BODY. 4. THE GOVERNING BODY SHALL BE EMPOWERED TO CO-OPT A MAXIMUM OF TWO MEMBERS TO ACT AS EXPERTS ON THE SUBJECT IF REQUIRED. 5. THE CHAIRMAN SHALL PRESIDE OVER THE MEETING OF T HE GOVERNING BODY .IN HIS ABSENCE THE MEMBERS PRESENT SHALL ELECT A CHAIRMAN FOR THE MEETING. 6. NOT LESS THAN FIFTEEN CLEAR DAYS NOTICE OF EVERY ME ETING OF THE GOVERNING BODY SHALL BE GIVEN TO EACH MEMBERS AT HIS ADDRESS. 7. THE GOVERNING BODY SHALL MEET AT LEAST TWO TIMES EV ERY YEAR. 8. TWO THIRD MEMBERS OF THE GOVERNING BODY PRESENT SHA LL CONSTITUTE THE QUORUM AT ANY MEETING OF GOVERNING BODY. 9. EACH MEMBER OF THE GOVERNING BODY EXCEPT THE CO-OP TED MEMBERS IF ANY INCLUDING THE CHAIRMAN SHALL HAVE ONE VOTE AND MAJO RITY DECISION SHALL PREVAIL. IN CASE OF EQUALITY OF VOTES ON ANY QUESTION THE CHAI RMAN SHALL HAVE THE CASTING VOTE. 10.THE GOVERNING BODY SHALL CARRY OUT THE FOLLOWING FUNCTIONS:- A. TO CARRY OUT THE OBJECTIVES OF THE SOCIETY AS SE T FORTH IN THE MEMORANDUM OF ASSOCIATION OF THE SOCIETY. B. TO MANAGE THE AFFAIRS AND HINDS OF THE SOCIETY A ND EXERCISE ALL POWERS OF THE SOCIETY IN ACCORDANCE WITH RULES OF THE SOCIETY. C TO PRESCRIBE RATES/TEES FOR THE SERVICES PROVIDED TO- THE MERCHANTS/TRADERS/ CONTRACTORS/ MANUFACTURERS/ DEAL ERS/ INDUSTRIALISTS. / D. TO APPROVE THE ANNUAL ACTION PLAN/ANNUA! BUDGET AND LIST OF ACTIVITIES SUBMITTED BY THE EXECUTIVE COMMITTEE OF THE SOCIETY AND PERIODICALLY MONITOR THE SAME. E. TO ACQUIRE FOR THE SOCIETY ASSETS. MOVEABLE OR IMMOVABLE WHICH ARE NECESSARY AND INCIDENTAL FOR THE PURPOSE ON SUCH TERMS AND CONDITIONS AS IT MAY DEEM FIT INCLUDING -BY WAY OF PURCHASE OR ENTERING INTO AGREEMENTS (MOUS). 11 F. TO INVEST FUND THAT MAY BE REQUIRED/ACQUIRED BY THE SOCIETY ON SUCH TERMS AND CONDITIONS AS MAY BE DEEMED ADVIS ABLE IN THE INTEREST OF THE SOCIETY. G. TO APPROVE THE APPOINTMENT OF AUDITOR FOR THE PU RPOSE OF CARRYING OUT THE AUDIT OF ACCOUNTS OF THE SOCIETY A NNUALLY AND CERTIFICATION OF ACCOUNTS SO PREPARED ON SUCH T ERMS AND CONDITIONS AS MAY BE DEEMED NECESSARY. H. TO APPROVE THE ANNUAL ACCOUNTS WHICH SHALL CONSI STS OF RECEIPT AND PAYMENT ACCOUNT INCOME AND EXPENDITURE ACCOUNTS AND BALANCE SHEET OF THE SOCIETY. I. TO CONTRACT PROFESSIONALS AND OUTSOURCE THE ACTI VITIES AS MAY BE NECESSARY TO CARRY OUT THE OBJECTS OF THE SOCIETY AND DISCHARGE ITS OB LIGATIONS AS MAY BE CONSIDERED APPROPRIATE. J. SUCH CONTRACTUAL ENGAGEMENTS AS STATED ABOVE SH OULD NOT EXCEED A DURATION OF 6 MONTHS AND A CONTRACTUAL AGREEMENT SHOULD BE SIGN ED BETWEEN THE COLLABORATING AGENCY AND THE AUTHORIZED SIGNATORY O F THE EXECUTIVE COMMITTEE. 11. THE GOVERNING BODY SHALL CONSTITUTE AN EXECUTIV E COMMITTEE AND DELEGATE TO IT SUCH POWERS AND FUNCTIONS AS IT MAY CONSIDER FI T. 10. ALL BUSINESS DISCUSSED OR DECIDED AT A MEETING OF THE GOVERNING BODY SHALL BE RECORDED IN A PROCEEDING BOOK WHICH SHALL BE SIGNED BY THE CHAIRMAN OF THE MEETING AND THE MEMBERS PRESENT. 4. EXECUTIVE COMMITTEE THE GOVERNING BODY SHALL CONSTITUTE AN EXECUTIVE CO MMITTEE FOR THE EFFICIENT MANAGEMENT OF THE FUNCTIONING OF THE SOCI ETY. 1. THE EXECUTIVE COMMITTEE SHALL COMPRISE OF' THE FOLL OWING MEMBERS: 1 COMMISSIONER EXCISE & TAXATION H.P. CHAIRMAN 2 ADDL. / JOINT SECRETARY (FIN.) GOVT. OF H.P. MEMB ER 3 ADDITIONAL COMMISSIONER (ADMN) EXCISE & TAXATION MEMBER 4 ADDITIONAL COMMISSIONER (TRU) EXCISE & TAXATION MEMBER 5 ASST. EXCISE & TAXATION COMMISSIONER SOLAN MEMBE R 6 ASSTT. EXCISE & TAXATION COMMISSIONER KANGRA MEM BER 7 ASSTT. EXCISE & TAXATION COMMISSIONER BILASPUR M EMBER 8 ASSTT. EXCISE & TAXATION COMMISSIONER NAHAN MEMB ER 12 9 DY. CONTROLLER (F&A) EXCISE & TAXATION DEPARTMENT H.P. MEMBER- SECY 2.THE EXECUTIVE COMMITTEE SHALL BE RESPONSIBLE FOR : 1. THE IMPLEMENTATION OF THE DECISIONS TAKEN BY THE GOVERNING BODY. 2. PREPARING PROPOSALS FOR ACTIVITIES TO BE TAKEN UP BY THE SOCIETY AND SUBMITTING THE SAME TO THE GOVERNING BODY FOR APPRO VAL. 3. MAINTENANCE OF ASSETS BOTH MOVEABLE AND IMMOVABLE OF THE SOCIETY. 4. MAINTENANCE OF RECORDS RELATED TO ASSETS OF THE SOCIETY AND PREPARATION OF MONTHLY CASH-ACCOUNT TRIAL BALANCE PERIODICAL REPORTS AND ANNUAL ACCOUNTS (RECEIPT AND PAYMENT AC COUNTS INCOME AND EXPENDITURE ACCOUNT AND BALANCE-SHEET) ETC. 5. THE EXECUTIVE COMMITTEE SHALL NOT BE EMPOWERED T O ENTER INTO ANY CONTRACTUAL AGREEMENT OR TO CREATE ANY FINANCIAL OB LIGATION OF RECURRING NATURE OR OTHERWISE WITHOUT THE SPECIFIC AND PRIOR APPROVA L OF THE GOVERNING BODY. 3. THE EXECUTIVE COMMITTEE SHALL MEET AT LEAST ONCE IN EVERY QUARTER TO TAKE STOCKS OF THE ACTIVITIES OF THE SOCIETY. 4. IT SHALL KEEP RECORD OF ALL SUCH MEETINGS IN THE PRESCRIBED FORMAT AND SEND MINUTES OF SUCH MEETINGS TO THE GOVERNING BODY. [ FUNDS OF THE SOCIETY THERE SHALL BE A CORPUS OF FUNDS INTO WHICH SHALL B E CREDITED THE FOLLOWING AMOUNT: I) AMOUNT COLLECTED PURSUANT TO ISSUANCE OF COMPUTERIZED S.T.XXVI-A FORM AT BARRIER(S)/SERVICES RENDERED. II) INTEREST RECEIPT. 8. ACCOUNT OF ST XX VI- A FORM 1. THE COMPUTER GENERATED ST XXVI-A FORM BEARING S ERIAL NUMBER SHALL BE ISSUED AT THE BARRIER(S) AND THE E.T.O/ IN CHARGE B ARRIER SHALL MAINTAIN PROPER ACCOUNT OF THE SAID FORMS UNDER THE SUPERVISION OF CONCERNED ASSISTANT EXCISE AND TAXATION COMMISSIONER OF THE DISTRICT. 2. E.T.O/ IN CHARGE BARRIER WILL DEPOSIT RS. 1/- OE R FORM(OUT OF THE AMOUNT OF RS.5/- PER FORM AS AT PRESENT OR AS PER RATES PRESC RIBED FROM TIME TO TIME IN RESPECT OF COMPUTERIZED ST-XXM-A FORM/SERVICES REND ERED)/ IN THE RELEVANT RECEIPT HEAD OF THE DEPARTMENT AS PER PRACTICE HITH ERTO FORE. 3. THE BALANCE AMOUNT AFTER DEPOSITING RS. L/-PER F ORM WILL BE CREDITED TO THE FUNDS OF THE SOCIETY AND DEPOSITED ON DAY TO DAY BA SIS IN A SAVING BANK ACCOUNT TO BE OPENED IN RESPECT OF EACH BARRIER(S) I WITH THE NEAREST SCHEDULED BANK/' COOPERATIVE BANK. 4. KEEPING IN VIEW THE REQUIREMENT OF THE FUNDS TH E EXECUTIVE COMMITTEE CAN AUTHORIZE THE ASSISTANT EXCISE AND TAXATION OFF ICER/IN CHARGE BARRIER CONCERNED TO INVEST THE AMOUNT IN EXCESS OF THEIR REQUIREMENT IN SHORT TERM DEPOSIT LEST THERE BE ANY LOSS OF INTEREST. 5. NOTWITHSTANDING ANY THING CONTAINED ABOVE THE A MOUNT COLLECTED SHALL BE AVAILAHLE FOX-BEING UTILIZED IN THE ENTIRE STATE FOR THE PURPOSE SET OUT AND AS PER APPROVAL OF THE GOVERNING BODY. 13 9. OPERATION OF ACCOUNT 1. THE SAVING BANK ACCOUNT SHALL BE OPERATED UNDER THE JOINT SIGNATURES OF ASSISTANT EXCISE AND TAXATION COMMISSIONER OF THE D ISTRICT CONCERNED AND THE RESPECTIVE IN CHARGE OF THE BARRIER. HOWEVER DAY T O DAY DEPOSIT INTO THE 'CORPUS OF FUNDS' INCLUDING MAINTENANCE OF ACCOUNTS(CASH BO OK LEDGERS AND ALLIED RECORDS) SHALL BE THE RESPONSIBILITY OF IN CHARGE O F THE BARRIER CONCERNED. 10 .OBJECT OF EXPENDITURE 1. FROM OUT OF THE CORPUS OF FUND THE EXPENDITURE FOR THE SPECIFIED PURPOSES AS INDICATED HEREUNDER SHALL BE MET OUT AT THE LEVEL O F CONCERNED ASSISTANT EXCISE AND TAXATION COMMISSIONER/INCHARGE BARRIER AFTER OB SERVING ALL CODAL FORMALITIES. I) COST OF TWO PART PRE PRIA.ED COMPUTER STATIONERY AL THE RATES TO BE APPROVED BY THE COMMISSIONER EXCISE AND TAXATION. II) COST OF CONSUMABLES FOR DATA STORAGE AND PRINTI NG. III) ELECTRICITY CHARGES. IV) EXPENDITURE FOR CARRYING OUT THE DATA ENTRY WOR K AT THE RATES AS APPROVED BY THE GOVERNING BOARD. V) COST OF COMPUTER HARDWARE AS APPROVED BY THE GOVERNING BOARD. EXPENDITURE ON ITEMS AS AT SR. NO.10.1(IV) AND 10.1 (V) IBID AND OTHER THAN THAT NOT MENTIONED ABOVE BUT WHICH ARE CONSIDERED INCIDENTAL FOR THE PURPOSE OF THE OBJECTS SHALL BE MADE ONLY WITH THE EXPLICIT AND PR IOR APPROVAL OF THE GOVERNING BODY. 2. AFTER MEETING THE EXPENSES TOWARDS THE OBJECTI VES FOR THE APPROVED PURPOSES LISTED ABOVE AND ACCOUNTING FOR THE LIABILITIES ACC RUED AND PROJECTED THE SURPLUS AMOUNT IF ANYSHALL BE DEPOSITED IN THE RECEIPT HE AD 0040-SALES TAX ON YEARLY BASIS ON APPROVAL OF THE GOVERNING BODY. 11. STORE/STOCK ACCOUNT 1. A SEPARATE ACCOUNT OF FIXED ASSETS ACQUIRED OUT OF THE CORPUS OF FUND SHALL BE MAINTAINED AT THE LEVEL OF BARRIER IN CHARGE AND STOCK VERIFICATION CARRIED OUT ANNUALLY BY THE CONCERNED ASSISTANT EXCISE AND TAXATION COMMISSIONER. 12. ACCOUNT OF CONSUMABLES I. CONSUMABLE ITEMS PURCHASED OUT OF THE CORPUS OF FUND SHALL ALSO BE ACCOUNTED FOR AS TO ITS RECEIPT DISPOSAL AND BALANCE AT THE LEVEL OF CONCE RNED BARRIER IN CHARGE. 13.ACCOUNTS AND AUDIT 1. THE ASSISTANT EXCISE AND TAXATION COMMISSIONER OF T HE -CONCERNED DISTRICTS SHALL MAINTAIN SUCH ACCOUNT AND OTHER RECORDS CONNECTED W ITH ACCOUNTS IN SUCH FORM OR MANNER AS MAY BE DIRECTED BY THE CHAIRMAN. EXECU TIVE COMMITTEE. 2 THE SOCIETY SHALL PREPARE AND SUBMIT RETURNS AND STATEMENTS AS THE CHAIRMAN EXECUTIVE COMMITTEE MAY FROM TIME TO TIME SPECIFY. 3. THE PROPRIETARY AUDIT OF THE ACCOUNTS OF THE COR PUS OF FUNDS SHALL BE CARRIED OUT BY THE INTERNAL FINANCE WING OF THE DEPARTMENT WHO SHALL ALSO BE COMPILING THE FINAL ACCOUNT WHICH SHALL BE GOT CERTIFIED FROM THE CHARTERED ACCOUNTANT APPOINTED BY THE GOVERNING BODY ON SUCH TERMS AND C ONDITIONS AS IT MAY DEEM FIT AND AUDITOR'S REPORT SHALL BE PLACED BEFORE THE GOVERNING BODY ANNUALLY. 14.ANNUAL REPORT 14 DRAFT ANNUAL REPORT ON THE WORKING OF THE SOCIETY S HALL BE PREPARED BY THE EXECUTIVE COMMITTEE AND SHALL BE PLACED BEFORE THE GOVERNING BODY FOR CONSIDERATION AND APPROVAL. COPIES OF THE APPROVED ANNUAL PLAN SHALL BE SUPPLIED TO THE MEMBERS OF THE SOCIETY AND OTHER CO NCERNED. 15.MISCELLANEOUS 1. NO ADDITION ALTERATION OR AMENDMENT SHALL BE MADE TO THE RULES AND REGULATIONS OF THE SOCIETY IN FORCE EXCEPT BY A RE SOLUTIONS PASSED AT A MEETING OF THE GOVERNING BODY BY A TWO THIRD MAJORITY OF TH E MEMBERS PRESENT. 2. IN CASE THE SOCIETY IS WOUND UP OR DISSOLVED THE A SSETS ACQUIRED BY THE SOCIETY AND REMAINING AFTER CLEARING OF ALL DEBTS A ND LIABILITIES SHALL NOT VEST IN THE MEMBERS OF THE SOCIETY. 3. THE ADDL.EXCISE AND TAXATION COMMISSIONER (HQRS)' D Y.CONTROLLER (FINANCE AND ACCOUNTS) OF THIS DEPARTMENT SHALL BE THE AUTH ORIZED SIGNATORIES TO SIGN FOR AND ON BEHALF OF THIS SOCIETY. 4. ALL THE PROVISIONS OF THE SOCITIES REGISTRATION ACT 1860 SHALL APPLY TO THE EXCISE AND TAXATION TECHNICAL SERVICE AGENCY. THIS IS TO CERTIFY THAT THE ABOVE IS A CERTIFIED CO PY OF THE RULES AND REGULATIONS OF THE EXCISE AND TAXATION TECHNICAL SERVICE AGENCY. 15 MEMORANDUM OF ASSSOCIATION H.P.EXCJSE AND TAXATION TECHNICAL SERVICE AGENCY 1 NAME THE NAME OF THE SOCIETY WILL BE H.P. EXCISE AND TAX ATION TECHNICAL SERVICE AGENCY. 2 REGISTERED THE REGISTERED OFFICE OF THE SOCIETY WILL BE AT SHIMLA IN THE STATE OF HIMACHAL PRADESH. 3 ADDRESS OF THE REGISTERED OFFICE THE ADDRESS OF REGISTERED OFFICE OF THE SOCIETY WIL L BE AS UNDER: EXCISE AND TAXATION TECHNICAL SERVICE AGENCY BLOCK NO. 30 S.D.A. COMPLEX KASUMPTI SHIMLA- 171009 HIMACHAL PRADESH 3.1 THE AREA OF OPERATION OF THE SOCIETY SHALL BE THE S TATE OF HIMACHAL PRADESH 4 OBJECTIVES THE OBJECTIVES OF THE SOCIETY SHALL BE: * TO FACILITATE THE GENERAL PUBLIC / DEALERS CARRYI NG GOODS AND CROSSING THE BARRIERS ESTABLISHED BY THE STATE GOVT . AND ALSO TO DIFFUSE AWARENESS AMONGST THE GENERAL PUBLIC/DEALER S ABOUT THE SALES TAX LAWS. * * TO UTILIZE THE INFORMATION TECHNOLOGY FOR DEEPER SYSTE MATIC REFORMS IN TAX ADMINISTRATION BY CREATION OF A SEPA RATE ENTITY PROPERLY GEARED TO PROVIDE SUPPORTIVE ROLE TO THE DEPARTMENT IN CREATION OF DATA-BANK(DEALER WISE/COMMODITY WISE CIRCLE WISE AVID BARRIER WISE) IN TRANSMISSION OF INFORMATION AND ESTABLISHMENT OF CLIENT SERVER ENVIRONMENT. * TO BACK UP THE COMPUTERIZATION REQUIREMENT OF THE DEPARTMENT OF EXCISE & TAXATION DEPARTMENT AND FOR THIS PURPOSE DEVELOP INFRASTRUCTURE THEREFORE BOTH IN TE RMS OF SOFTWARE AS WELL AS HARDWARE. * TO FACILITATE ADOPTION OF STXXVI -A FORM IN A CO MPUTER FRIENDLY FORMAT AND GENERATE FUNDS BY RENDERING THI S SERVICES TO THE DEALERS SO AS TO MAKE IT A SELF SUSTAINING ACTIVITY. * TO CARRY OUT ALL SUCH ACTIVITIES AS ARE ENVISAGED IN SECTION 20 OF THE SOCIETY REGISTRATION ACT 18 50 WHICH ARE IN THE INTEREST OF SOCIETY. * TO DERIVE OPTIMUM BENEFITS FROM FULLY NETWORKED COMPUTERIZATION IN TERMS OF PROVIDING COMPUTERIZED FUNCTIONING OF MULTI-PURPOSE BARRIERS ISSUANCE OF COMPUTERIZED RECEIPTS ON-LINE NETWORKING TO FACILITATE SHARING OF DATA BETWEEN ALL OFFICES/ASSESSING AUTHORITIES IN T H E DEPARTMENT AND DEVELOP OTHER RELATED INFRASTRUCTURES INCIDENTA L THERETO. THE SOCIETY SHALL FOR THIS PURPOSE GENERATE RECEIP TS IN LIEU OF PROVIDING THESE SERVICES AT THE MULTI PURPOSES BARR IERS AND UTILIZE THE SAME TO FULFILL THE OBJECTIVES OF THE S OCIETY. AND IN FURTHERANCE OF THE ABOVE OBJECTIVES: I) DEVELOP CREATE MANAGE AND MAINTAI N INFRASTRUCTURE FOR PROVIDING SUCH SERVICES. PURSUANT TO THE AFORESAID OBJECTS THE SOCIETY WILL USE / HAVE CONTROL OVER THE ASSETS CREATED BY IT AND WILL ALSO: I) DRAW ACCEPT MAKE ENDORSE DISCOUNT AND DEPOSIT C HEQUES AND OTHER NEGOTIABLE INSTRUMENTS. II) IMPOSE AND RECOVER FEES AND CHARGES FOR THE SER VICES RENDERED BY IT. III) UTILIZE AND DEAL WITH MONEYS CREDITED TO THE S OCIETY AS APPROVED BY THE GOVERNING BODY. 16 IV) TAKE ASSISTANCE FROM OR COLLABORATE WITH OTHER INSTITUTIONS OF STATE/CENTRAL GOVT. E.G. N.I.C; STATE INFRASTRUCTURE BOARD; R.E.C ; APTECH AND SIDHI VINAYAK ETC. FOR PURPOSES OF DEVELOPING COMPUTERIZATION INFRASTR UCTURE AT DESIGNATED BARRIERS. V) PURCHASE HIRE TAKE ON LEASE EXCHANGE OR OTHER WISE ACQUIRE A PROPERTY MOVEABLE OR IMMOVABLE WHICH MAY BE NECESSARY OR C ONVENIENT FOR THE PURPOSE OF THE SOCIETY AND CONSTRUCT ALTER AND /O R MAINTAIN SUCH BUILDINGS AND WORKS AS MAY BE NECESSARY FOR CARRYING OUT THE OBJ ECTS OF THE SOCIETY. VI) MAKE RULES AND BYE-LAWS FOR THE SMOOTH CONDUCT OF THE AFFAIRS OF THE SOCIETY AND ADD TO AMEND VARY OR RESCIND THEM FROM TIME TO TIME. VII) TO DO ALL SUCH OTHER THINGS AS THE SOCIETY MAY CONSIDER NECESSARY INCIDENTAL OR CONDUCIVE FOR THE ATTAINMENT OF THE ABOVE OBJECTIVES. THE NAMES ADDRESSES DESIGNATIONS AND OCCUPATIONS OF THE MEMBERS OF THE FIRST GOVERNING BODY WHO SHALL HOLD OFFICE TILL A GOVERN ING BODY IS DULY CONSTITUTED UNDER THE BYE-LAWS OF THE SOCIETY ARE AS UNDER: 1. SH. T.G.NEGI IAS PRINCIPAL SECRETARY EXCISE AND TAXATION HP. 2. SH. ANIL KUMAR KHACHI IAS SECRETARY(FINANCE) / DIRECTOR PUBLIC ENTERPRISES AND INSTITUTIONAL FINANCEJH.P. 3 SH. NARINDER CHAUHAN IAS COMMISSIONER EXCISE AND TAXATION H.P. 4. SH. K.K. GUPTA IFS MANAGING DIRECTOR ELECTRONIC DEV. CORPORATION H.P. 5. SH. AJAY SINGH CBAHAL PRINCIPAL SYSTEM ANALYST NATIONAL INFORMATICS CENTRE HP SHIMLA-2. 6. SH. A.S.RATHOR HAS ADDITIONAL COMMISSIONER E&T (ADMN.) 7. SH. GIAN RAITA DY. CONTROIIER(F&A) EXCISE & TAXATION DEPARTMENT H.P. 25. THE LD. AR FURTHER ARGUED AND SUBMITTED THAT O N GOING THROUGH THE ENTIRE RULES AND REGULATION THE IMPORTANT POINTS TO DETERM INE THE ISSUE AT HAND CAN BE SUMMARIZED WHICH HAVE BEEN DETAILED BELOW: THE ASSESSEE-SOCIETY WAS REGISTERED UNDER THE SOCIE TY REGISTRATION ACT 1860 ON 27.08.2002. THE OBJECT OF THE SOCIETY S O INCORPORATED IN THE MEMORANDUM OF OF ASSOCIATION INTER-ALIA INCLUDES TH E FOLLOWINGS:- 'TO FACILITATE THE GENERAL PUBLIC/DEALERS CARRYING GOODS AND CROSSING THE BARRIERS ESTABLISHED BY THE STATE GOVT AND ALSO TO DIFFUSE AWARENESS AMONGST THE GENERAL PUBLIC/DEALERS ABOUT THE SALES TAX LAWS. TO UTILISE THE INFORMATION TECHNOLOGY FOR DEEPER SY STEMATIC REFORMS IN TAX ADMINISTRATION BY CREATION OF A SEPARATE ENTITY PRO PERLY GEARED TO PROVIDE SUPPORTIVE ROLE TO THE DEPARTMENT IN CREATI ON OF DATA BANK 17 (DEALER WISE/COMMODITY WISE. CIRCLE WISE AND BARRIE R WISE) IN TRANSMISSION OF INFORMATION AND ESTABLISHMENT OF CLIENT SERVER E NVIRONMENT. TO BACK UP THE COMPUTERIZATION REQUIREMENT OF THE D EPARTMENT OF EXCISE & TAXATION DEPARTMENT AND FOR THIS PURPOSE DEVELOP INFRASTRUCTURE THEREFORE BOTH IN TERMS OF SOFTWARE AS WELL AS HARD WARE. TO FACILITATE ADOPTION OF STXXVI-A FORM IN A COMPUT ER FRIENDLY FORMAT AND GENERATE FUNDS BY RENDERING THIS SERVICES TO THE DE ALERS SO AS TO MAKE IT A SELF SUSTAINING ACTIVITY. TO EARN OUT ALL SUCH ACTIVITIES AS ARE ENVISAGED IN SECTION 20 OF THE SOCIETY REGISTRATION ACT 1860 WHICH ARE IN THE INTEREST OF SOCIETY. TO DERIVE OPTIMUM BENEFITS FROM FULLY NETWORKED COM PUTERIZATION IN TERMS OF PROVIDING COMPUTERIZED FUNCTIONING OF MULTI-PURP OSE BARRIERS ISSUANCE OF COMPUTERIZED RECEIPTS ON LINE NETWORKING TO FAC ILITATE SHARING OF DATA BETWEEN ALL OFFICES/ASSESSING AUTHORITIES IN THE DE PARTMENT AND DEVELOP OTHER RELATED INFRASTRUCTURES INCIDENTAL THERETO. THE SOCIETY SHALL FOR THIS PURPOSE GENERATE RECEIP TS IN LIEU OF PROVIDING THESE SERVICES AT. THE MULTI-PURPOSES BARRIERS AND UTILI ZE THE SAME TO FULFILL THE OBJECTIVES OF THE SOCIETY. AND IN FURTHERANCE OF THE ABOVE OBJECTIVES: I) DEVELOP CREATE MANAGE AND MAINTAIN INFRASTRUCT URE FOR PROVIDING SUCH SERVICES.' B). THAT PRIMARY FUNDS OF THE SOCIETY WERE 10 BE AU GMENTED BY COLLECTING STATUTORY LEVY AS PER SECTION 34 OF THE H.P. VAT AC T READ WITH RULES 61 AND 62 OF THE H.P VAT RULES IN RESPECT OF DECLARATION TO BE M ADE BY THE DEALERS COMING IN OR GOING OUT OF THE STATE OF HIMACHAL PRADESH IN FO RM ST-XXVI-A AS PER PARA-8 OF THE BYE-LAWS. INITIALLY COST OF PER DECLARATION AS PER THE RULES SET BY THE GOVERNMENT OF HIMACHAL PRADESH WAS RS.5/- AND UPON THE COLLECTION OF THE SAME RS.L/- WAS IMMEDIATELY TO GO TO THE GOVT AND THEREAFTER BY VIRTUE OF BYE- LAWS BEING 10.2 AFTER MEETING OUT EXPENDITURE REMAI NING AMOUNT HAD TO BE TRANSFERRED TO THE STATE GOVERNMENT IN SALES TAX HE AD. PARA-8 AND 10.2 OF THE BYE- LAWS ARE BEING REPRODUCED INFRA FOR YOUR KIND PERUS AL AND READ) REFERENCE:- '8. ACCOUNT OF ST XXV1-A FORM 1. THE COMPUTER GENERATED STXXVI-A FORM BEARING SERIAL NUMBER SHALL BE ISSUED AT THE BARRIER(S) AND THE E.T.O/IN CHARGE BA RRIER SHALL MAINTAIN PROPER ACCOUNT OF THE SAID FORMS UNDER THE SUPERVISION OF CONCERNED ASSISTANT EXCISE AND TAXATION COMMISSIONER OF THE DISTRICT. 2. E.T.O/LN CHARGE BARRIER WILL DEPOSIT RS.L/- PER FOR M (OUT OF THE AMOUNT OF RS.5/- PER FORM AS AT PRESENT OR AS PER RATES PRESC RIBED FROM TIME TO TIME IN RESPECT OF COMPUTERIZED ST-XXVI-A FORM/SERVICES REN DERED)/ IN THE RELEVANT RECEIPT HEAD OF THE DEPARTMENT AS PER PRACTICE HITH ERTO FORE. 3. THE BALANCE AMOUNT AFTER DEPOSITING RS. 1 - PER FOR M WILL BE CREDITED TO THE FUNDS OF THE SOCIETY AND DEPOSITED ON DAY TO DA Y BASIS IN A SAVING BANK ACCOUNT LO BE OPENED IN RESPECT OF EACH BARRIE R(S) WITH THE NEAREST SCHEDULE BANK / COOPERATIVE BANK. 4. KEEPING IN VIEW THE REQUIREMENT OF THE FUNDS THE E XECUTIVE COMMITTEE CAN AUTHORIZE THE ASSISTANT EXCISE AND TA XATION OFFICER / IN CHARGE BARRIER CONCERNED TO INVEST THE AMOUNT IN EX CESS OF THEIR REQUIREMENT IN SHORT TERM DEPOSIT TEST THERE BE ANY LOSS OF INTEREST. 5. NOTWITHSTANDING ANY THING CONTAINED ABOVE THE A MOUNT COLLECTED SHALL BE AVAILABLE FOR BEING UTILIZED IN THE ENTIRE STATE FO R THE PURPOSES SET OUT AND AS' PER APPROVAL OF THE GOVERNING BODY. 18 10.2 AFTER MEETING THE EXPENSES TOWARDS THE OBJECTI VES FOR THE APPROVED PURPOSES LISTED ABOVE AND ACCOUNTING FOR THE LIABIL ITIES ACCRUED AND PROJECTED THE SURPLUS AMOUNT IF ANY SHALL BE DEPOSITED IN T HE RECEIPT HEAD 0040 SALES TAX ON YEARLY BASIS ON APPROVAL OF THE GOVERNING BODY.' 26. IN ORDER TO EXAMINE THE FUNCTIONING OF THE SOCI ETY VIS--VIS H.P. VAT ACT 2005 THE RELEVANT PROVISIONS OF H.P. VAT ACT PERTA INING TO ESTABLISHMENT OR BARRIERS AND INSPECTION OF GOODS IN TRANSIT ARE EXA MINED. THE PROVISIONS ARE AS UNDER: SECTION 34(1) OF THE VAT ACT 2005 MAINLY DEALS WITH ESTABLISHMENT OF THE CHECK POST AND THEIR MANAGEMENT IN SECTION 34(2). ESTABLISHMENT OF CHECK POSTS OR BARRIERS AND INSPEC TION OF GOODS IN TRANSIT. (1) IF WITH VIEW TO PREVENTING OR CHECKING EVASION OF TAX UNDER THIS ACT THE STATE GOVERNMENT CONSIDERS IT NECESSARY SO TO DO IT MAY BY NOTIFICATION DIRECT THE ESTABLISHMENT OF A CHECK POST OR THE ERECTION OF A BARRIER OR BOTH AT SUCH PLACES AS MAY BE NOTIFIED. (2) THE OWNER OR PERSON IN-CHARGE OF A GOODS CARRIAGE O R VESSEL SHALL CARRY WITH HIM A GOODS CARRIAGE RECORD A TRIP SHEET OR A LOG BOOK AS THE CASE MAY BE AND A TAX INVOICE OR A BILL OF SALE OR A DELIVERY NOTE CONTAINING SUCH PARTICULARS AS MAY BE PRESCRIBED IN RESPECT OF SUCH GOODS MEANT FOR THE PURPOSE OF BUSINESS AND PRODUCE THE SAME BEFORE AN OFFICER IN-CHARGE OF A C HECK POST OR BARRIER OR ANY OTHER OFFICER NOT BELOW THE RANK OF AN EXCISE AND T AXATION INSPECTOR CHECKING THE VEHICLE OR VESSEL AT ANY PLACE. (2-A) THE OWNER OR THE PERSON-IN-CHARGE OF A GOODS VEHICLE OR VESSEL ENTERING THE LIMITS OF THE STATE OR LEAVING THE STATE LIMITS SHA LL FOR THE PURPOSES OF THIS SECTION ONLY PASS THROUGH AND STOP AT THE NEAREST CHECK POS T OR BARRIER FAILING WHICH SUCH OWNER OR PERSON-IN-CHARGE SHALL BE LIABLE TO PAY A PENALTY TO BE IMPOSED BY ANY OFFICER REFERRED TO IN SUB-SECTION (2) EQUAL TO TEN PERCENTUM OF THE VALUE OF GOODS OR TEN THOUSAND RUPEES WHICHEVER IS GREATER AND SUC H PENALTY SHALL BE IN ADDITION TO ANY OTHER PENALTY PROVIDED FOR IN THIS SECTION. (3) AT EVERY CHECK POST OR BARRIER OR AT ANY OTHER PLACE WHEN SO REQUIRED BY ANY OFFICER REFERRED TO IN SUB-SECTION (2) THE DRIVER OR ANY OTHER PERSON-IN-CHARGE OF THE [GOODS CARRIAGE] OR VESSEL SHALL STOP THE VEHI CLE OR VESSEL AS THE CASE MAY BE AND KEEP IT STATIONARY AS LONG AS MAY REASONABL Y BE NECESSARY AND ALLOW THE OFFICER-IN-CHARGE OF THE CHECK POST OR BARRIER OR THE AFORESAID OFFICER TO EXAMINE THE CONTENTS IN THE VEHICLE OR VESSEL AND I NSPECT ALL RECORDS RELATING TO THE GOODS CARRIED WHICH ARE IN THE POSSESSION OF SU CH DRIVER OR OTHER PERSON-IN- CHARGE WHO SHALL ALSO FURNISH SUCH OTHER INFORMATI ON AS MAY BE REQUIRED BY THE AFORESAID OFFICER AND IF CONSIDERED NECESSARY SUCH OFFICER MAY ALSO SEARCH THE [GOODS CARRIAGE] OR VESSEL AND THE DRIVER OR OTHER PERSON-IN-CHARGE OF THE VEHICLE OR VESSEL OR OF THE GOODS. (4) THE OWNER OR PERSON-IN-CHARGE OF A GOODS CARRIA GE OR VESSEL ENTERING THE LIMITS OF STATE OR LEAVING THE STATE LIMITS SHALL ALSO GIV E IN TRIPLICATE A DECLARATION (GENERATED ELECTRONICALLY OR OTHERWISE) CONTAINING SUCH PARTICULARS OF GOODS CARRIED IN SUCH VEHICLE OR VESSEL AS THE CASE MAY BE BEFORE THE OFFICER-IN-CHARGE OF THE CHECK POST OR BARRIER AND SHALL PRODUCE THE COPY OF THE SAID DECLARATION DULY VERIFIED AND RETURNED TO HIM BY THE SAID OFFIC ER OR BEFORE ANY OTHER OFFICER REFERRED TO IN SUB-SECTION (2) AT THE TIME OF CHECK ING UNDER THIS SECTION: PROVIDED THAT WHERE A GOODS CARRIAGE OR VESSEL BOUN D FOR ANY PLACE OUTSIDE THE STATE PASSES THROUGH THE STATE THE OWNER OR PERSON -IN-CHARGE OF SUCH VEHICLE OR VESSEL SHALL FURNISH IN DUPLICATE TO THE OFFICER- IN-CHARGE OF THE CHECK POST OR BARRIER OF HIS ENTRY INTO THE STATE A DECLARATION I N THE PRESCRIBED FORM AND OBTAIN FROM HIM A COPY DULY VERIFIED. THE OWNER OR PERSON IN-CHARGE OF THE GOODS 19 CARRIAGE OR VESSEL AS THE CASE MAY BE SHALL DELIV ER WITHIN SEVENTY TWO HOURS THE SAID COPY TO THE OFFICER-IN-CHARGE OF THE CHECK POS T OR BARRIER AT THE POINT OF ITS EXIT FROM THE STATE FAILING WHICH HE SHALL BE LIAB LE TO PAY A PENALTY TO BE IMPOSED BY THE OFFICER-IN-CHARGE OF THE CHECK POST OR BARRI ER OF THE ENTRY EQUAL TO FIFTY PERCENTUM PROVIDED FURTHER THAT WHERE THE GOODS CARRIED BY SU CH VEHICLE ARE AFTER THEIR ENTRY INTO THE STATE TRANSPORTED OUTSIDE THE STATE BY ANY OTHER VEHICLE OR CONVEYANCE THE BURDEN OF PROVING THAT THE GOODS HA VE ACTUALLY MOVED OUT OF THE STATE SHALL LIE ON THE OWNER OR PERSON-IN-CHAR GE OF THE VEHICLE OR VESSEL; PROVIDED FURTHER THAT NO PENALTY SHALL BE IMPOSED U NLESS THE PERSON CONCERNED HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HE ARD. (5) AT EVERY STATION OF TRANSPORT OF GOODS BUS STA ND OR ANY OTHER STATION OR PLACE OF LOADING OR UNLOADING OF GOODS OTHER THAN A RAIL HEAD OR A POST OFFICE WHEN SO REQUIRED BY THE COMMISSIONER OR ANY PERSON APPOINT ED TO ASSIST HIM UNDER SUB- SECTION (1) OF SECTION 3 THE DRIVER OR THE OWNER OF GOODS CARR IAGE OR THE EMPLOYEE OF A TRANSPORT COMPANY OR GOODS BOOKING AG ENCY SHALL PRODUCE FOR EXAMINATION TRANSPORT RECEIPT AND ALL OTHER DOCUMEN TS AND ACCOUNT BOOKS CONCERNING THE GOODS CARRIED TRANSPORTED LOADED UNLOADED CONSIGNED OR RECEIVED FOR TRANSPORT (MAINTAINED BY HIM IN THE PR ESCRIBED MANNER). THE COMMISSIONER OR THE PERSON SO APPOINTED SHALL FOR THE PURPOSE OF EXAMINING THAT SUCH TRANSPORT RECEIPTS OR OTHER DOCUMENTS OR ACCOU NT BOOKS ARE IN RESPECT OF THE GOODS CARRIED TRANSPORTED LOADED UNLOADED O R CONSIGNED OR RECEIVED FOR TRANSPORT HAVE THE POWERS TO BREAK OPEN ANY PACKAG E OR PACKAGES OF SUCH GOODS. (6) IF THE OFFICER-IN-CHARGE OF THE CHECK POST OR B ARRIER OR OTHER OFFICER AS MENTIONED IN SUB-SECTION (2) HAS REASONS TO SUSPECT THAT THE GOODS UNDER TRANSPORT ARE MEANT FOR BUSINESS AND ARE NOT COVERE D BY PROPER AND GENUINE DOCUMENTS AS MENTIONED IN SUBSECTION (2) OR SUB-SEC TION (4) AS THE CASE MAY BE OR THAT THE PERSON TRANSPORTING THE GOODS IS AT TEMPTING TO EVADE PAYMENT OF TAX DUE UNDER THIS ACT HE MAY FOR REASONS TO BE R ECORDED IN WRITING AND AFTER HEARING THE SAID PERSON BUT SUBJECT TO PERVIOUS AP PROVAL OF THE EXCISE AND TAXATION OFFICER INCHARGE OF THE BARRIER ORDER THE UNLOADING OR DETENTION OF THE GOODS FOR SUCH PERIOD AS MAY REASONABLY BE NECESSA RY AND SHALL ALLOW THE SAME TO BE TRANSPORTED ONLY ON THE OWNER OF GOODS OR HIS REPRESENTATIVE OR THE DRIVER OR OTHER PERSON IN-CHARGE OF THE GOODS CARRIAGE OR VES SEL ON BEHALF OF THE OWNER OF THE GOODS FURNISHING TO HIS SATISFACTION A SECURIT Y IN THE FORM OF CASH OR BANK GUARANTEE OR BANK DRAFT EQUAL TO TWENTY-FIVE PERCE NTUM OF THE VALUE OF THE GOODS. PROVIDED THAT WHERE ANY GOODS ARE DETAINED A REPORT SHALL BE MADE IMMEDIATELY AND IN ANY CASE WITHIN TWENTY FOUR HOUR S OF THE DETENTION OF THE GOODS BY THE OFFICER DETAINING THE GOODS TO THE ASS ISTANT EXCISE AND TAXATION COMMISSIONER INCHARGE OF THE DISTRICT OR THE EXCISE AND TAXATION OFFICER INCHARGE OF THE DISTRICT OR BARRIER AS THE CASE MAY BE SEE KING THE LATTER'S PERMISSION FOR THE DETENTION OF THE GOODS FOR A PERIOD EXCEEDING TWENT Y-FOUR HOURS AS AND WHEN SO REQUIRED AND IF NO INTIMATION TO THE CONTRARY IS RE CEIVED FROM THE LATTER THE FORMER MAY ASSUME THAT HIS PROPOSAL HAS BEEN ACCEPTED. (7) THE OFFICER DETAINING THE GOODS SHALL RECORD TH E STATEMENT IF ANY GIVEN BY THE OWNER OF THE GOODS OR HIS REPRESENTATIVE OR THE DRI VER OR OTHER PERSON-IN-CHARGE OF THE GOODS CARRIAGE OR VESSEL AND SHALL REQUIRE HIM TO PRODUCE PROPER AND GENUINE DOCUMENTS AS REFERRED TO IN SUB-SECTION (2) OR SUB-SECTION (4) AS THE CASE MAY BE BEFORE HIM IN HIS OFFICE ON A SPECIFIE D DATE ON WHICH DATE THE OFFICER SHALL SUBMIT THE PROCEEDING ALONG WITH THE CONNECTED RECORDS TO SUCH OFFICER AS MAY BE AUTHORISED IN THAT BEHALF BY THE STATE GOVERNMENT FOR CONDUCTING NECESSARY ENQUIRY IN THE MATTER. THE SAI D OFFICER SHALL BEFORE CONDUCTING THE ENQUIRY SERVE A NOTICE ON THE OWNER OF THE GOODS AND GIVE HIM AN OPPORTUNITY OF BEING HEARD AND IF AFTER THE ENQ UIRY SUCH OFFICER FINDS THAT THERE HAS BEEN AN ATTEMPT TO EVADE THE TAX DUE UNDE R THIS ACT HE SHALL BY ORDER IMPOSE ON THE OWNER OF THE GOODS A PENALTY E QUAL TO TWENTY-FIVE 20 PERCENTUM OF THE VALUE OF THE GOODS AND IN CASE HE FINDS OTHERWISE SHALL ORDER THE RELEASE OF THE GOODS. (8) IF THE OWNER OF THE GOODS OR HIS REPRESENTATIVE OR THE DRIVER OR OTHER PERSON-IN-CHARGE OF THE GOODS CARRIAGE OR VES SEL DOES NOT FURNISH SECURITY OR DOES NOT EXECUTE THE BOND AS RE QUIRED BY SUB- SECTION (6) WITHIN TEN DAYS FROM THE DATE OF DETAIN ING THE GOODS OR GOODS CARRIAGE OR VESSEL THE OFFICER REFERRED T O IN THAT SUB- SECTION MAY ORDER FURTHER DETENTION OF THE GOODS AN D IN THE EVENT OF THE OWNER OF THE GOODS NOT PAYING THE PENALTY IM POSED UNDER SUB-SECTION (7) WITHIN TWENTY DAYS FROM THE DATE OF THE ORDER IMPOSING THE PENALTY THE GOODS DETAINED SHALL BE M ADE LIABLE TO BE SOLD BY THE OFFICER WHO IMPOSED THE PENALTY FO R THE REALISATION OF THE PENALTY BY PUBLIC AUCTION AS MAY BE PRESCRIBED . IF THE GOODS DETAINED ARE OF A PERISHA BLE NATURE OR SUBJECT TO SPEEDY OR NATURAL DECAY OR WHEN THE EXPE NSES OF KEEPING THEM IN CUSTODY ARE LIKELY TO EXCEED THEIR VALUE THE OFFICER -IN-CHARGE OF THE CHECK POST OR BARRIER OR ANY OTHER OFFICER REFERRED TO IN SUB-SECTION (2) AS THE CASE MAY BE SHALL IMMEDIATELY SELL SUCH GOODS OR OTHERWISE DISPOSE TH EM OF. THE SALE PROCEEDS SHALL BE DEPOSITED IN THE GOVERNMENT TREASURY AND THE OWNER OF THE GOODS SHALL BE ENTITLED TO ONLY TH E BALANCE AMOUNT OF SALE PROCEEDS AFTER DEDUCTING THE EXPENSE S AND OTHER INCIDENTAL CHARGES INCURRED IN DETAINING AND DISPOS ING OF THE GOODS. (9) THE OFFICER DETAINING THE GOODS SHALL ISSUE TO THE OWNER OF THE GOODS OR HIS REPRESENTATIVE OR THE DRIVER OR THE PE RSON-IN -CHARGE OF THE GOODS CARRIAGE OR VESSEL RECEIPT SPECIFYING THE DESCRIPTION AND QUANTITY OF THE GOODS SO DETAINED AND OBTAIN AN ACKNOWLEDGEMENT FROM SUCH PERSON OR IF SUCH PERSON REFUSES TO GIVE AN AC KNOWLEDGMENT RECORD THE FACT OF REFUSAL IN THE PRESENCE OF THE TWO WITNESSES. (10) IF THE ORDER OF DETENTION OF GOODS UNDER SUB-S ECTION (6) OR OF IMPOSITION OF PENALTY UNDER SUB-SECTION (7) OR SUB- SECTION (8) IS IN THE MEANTIME SET ASIDE OR MODIFIED IN APPEAL OR OTHER PROCEEDINGS THE OFFICER DETAINING THE GOODS AND IM POSING THE PENALTY AS THE CASE MAY BE SHALL ALSO PASS CONSEQ UENTIAL ORDERS FOR GIVING EFFECT TO THE ORDERS IN SUCH APPEAL OR O THER PROCEEDINGS AS THE CASE MAY BE. (11) NO DEALER OR ANY PERSON INCLUDING A CARRIER O F GOODS OR AGENT OF A TRANSPORT COMPANY OR BOOKING AGENCY ACTI NG ON BEHALF OF A DEALER SHALL TAKE DELIVERY OF OR TRANSPORT FROM ANY VESSEL STATION AIRPORT OR ANY OTHER PLACE WHETHER OF SIM ILAR NATURE OR OTHERWISE ANY CONSIGNMENT OF GOODS OTHER THAN PERS ONAL LUGGAGE OR GOODS FOR PERSONAL CONSUMPTION THE SALE OR PURCHASE OF WHICH IS TAXABLE UNDER THIS ACT EXCEPT IN ACCOR DANCE WITH SUCH CONDITIONS AS MAY BE PRESCRIBED WITH A VIEW TO ENSURING THAT THERE IS NO EVASION OF THE TAX IMPOSED BY OR U NDER THIS ACT: PROVIDED THAT NO PLACE WHICH IS A RAILHEAD OR POST- OFFICE SHALL BE SO NOTIFIED BY THE STATE GOVERNMENT. (12) WHERE ANY PERSON INCHARGE IN GOODS CARRIAGE OR VESSEL OR ANY OTHER TRANSPORTER FAILS TO GIVE INFORMATION AS REQUIRED U NDER SUBSECTION (2) ABOUT THE CONSIGNOR OR CONSIGNEE OF THE GOODS WITHIN SUCH TI ME AS MAY BE REQUIRED BY THE OFFICER-INCHARGE OF THE CHECK POST OR BARRIER OR OT HER OFFICER AS MENTIONED IN SUB- SECTION (2) OR TRANSPORTS THE GOODS WITHOUT DOCUME NTS OR WITH INGENUINE DOCUMENTS [OR PRESENTS BILLS FOR DECLARATION AT TH E BARRIER WITHOUT THE CONSIGNMENT PURPORTED TO BE TRANSPORTED UNDER THOSE BILLS] ANY OFFICER NOT BELOW THE RANK OF EXCISE AND TAXATION OFFICER CHECKING TH E GOODS SHALL AFTER AFFORDING SUCH OWNER OR PERSON INCHARGE OR SUCH TRANSPORTER A REASONABLE OPPORTUNITY OF BEING HEARD DIRECT HIM TO PAY BY WAY OF PENALTY E QUAL TO TEN PERCENTUM OF THE VALUE OF SUCH GOODS.] 21 PROVIDED THAT THE OWNER OR THE PERSON-IN-CHARGE OF GOODS VEHICLE OR VESSEL LEAVING 1 'OR ENTERING' THE STATE LIMITS AND WHO HAS FURNISHE D FULL DECLARATION OF GOODS CARRIED IN VEHICLE IN FORM VAT XXVI-A ELECTRO NICALLY THROUGH THE OFFICIAL WEB-SITE OF THE DEPARTMENT SHALL NOT BE REQUIRED TO STOP THE VEHICLE OR VESSEL FOR THE PURPOSE OF THIS SECTION AT THE CHECK-POST OR B ARRIER; PROVIDED FURTHER THAT THE OFFICER-IN-CHARGE OF THE CHECK-POST OR BARRIER OR ANY OTHER OFFICER NOT BELOW THE RANK OF EXCISE AND TAXA TION INSPECTOR POSTED AT THE CHECK-POST OR BARRIER IF CONSIDERS NECESSARY MAY STOP THE VEHICLE OR VESSEL FOR THE PURPOSE OF THIS SECTION THE OWNER OR THE PERSON-IN -CHARGE OF THE VEHICLE OR VESSEL SHALL STOP IT AND KEEP IT STATIONARY AS LONG AS MAY REASONABLY BE NECESSARY FAILING WHICH SUCH OWNER OR PERSON-IN-CHARGE SHALL BE LIABL E TO PAY PENALTY TO BE IMPOSED BY SUCH OFFICER EQUAL TO TEN PERCENTUM OF T HE VALUE OF GOODS OR TEN THOUSAND RUPEES WHICHEVER IS HIGHER. CENTRAL ACT NO. 59 OF 1988 EXPLANATION I.-IN THIS SECTION THE EXPRESSION 'GOODS CARRIAGE' HAS THE SAME MEANING AS IS ASSIGNED TO IT IN CLAUSE (14) OF SECT ION 2 OF THE MOTOR VEHICLES ACT 1988. EXPLANATION-- II.- FOR THE PURPOSES OF SUB-SECTION (2) THE GOODS MEANT FOR THE PURPOSES OF PERSONAL CONSUMPTION SHALL NOT BE CONST RUED AS MEANT FOR THE PURPOSES OF BUSINESS. EXPLANATION III.- FOR PURPOSES OF SUB-SECTION (7) SERVICE OF N OTICE ON THE REPRESENTATIVE OF THE OWNER OR THE DRIVER OR OTHER PERSON-IN-CHARGE OF THE GOODS CARRIAGE OR VESSEL SHALL BE DEEMED TO BE A VALID SE RVICE ON THE OWNER OF THE GOODS. REGISTRATION AND SUBMISSION OF RETURNS BY CARRIER O F GOODS AND AGENT OF TRANSPORT COMPANIES. 35. (1) FOR CARRYING OUT THE PURPOSES OF SECTION 34 EVERY CARRIER OF GOODS AGENT OF TRANSPORT COMPANY AND BOOKING AGENCY HAVING A PL ACE OF BUSINESS IN THE STATE OF HIMACHAL PRADESH AND TRANSPORTING OR CLEAR ING OR FORWARDING GOODS ON BEHALF OF A DEALER SHALL BE REQUIRED TO OBTAIN A C ERTIFICATE OF REGISTRATION IN THE PRESCRIBED MANNER FROM THE ASSESSING AUTHORITY OF THE AREA IN WHICH IT HAS A PLACE OF BUSINESS ON PAYMENT OF SUCH FEE AS MAY BE PRESCRIBED AND ON FURNISHING OF A SECURITY TO THE SATISFACTION OF THE SAID AUTHORITY IN THE MANNER AS MAY BE PRESCRIBED. (2) EVERY AGENCY REFERRED TO IN SUB-SECTION (1) SHALL SUBMIT TO THE ASSESSING AUTHORITY SUCH RETURNS OF THE GOODS TRANSPORTED CL EARED OR FORWARDED BY IT BY SUCH DATES AND IN SUCH MANNER AS MAY BE PRESCRIBED. 27. FROM THE READING OF RULES AND REGULATIONS OF TH E ASSESSEE SOCIETY MEMORANDUM OF ASSOCIATION OF THE SOCIETY AND HP VA T ACT 2005 THE FOLLOWING POINTS EMERGED: THE ASSESSEE-SOCIETY WAS REGISTERED UNDER THE SOCIE TY REGISTRATION ACT 1860 ON 27.08.2002. THE OBJECT OF THE SOCIETY S O INCORPORATED IN THE MEMORANDUM OF OF ASSOCIATION INTER-ALIA INCLUDES TH E FOLLOWINGS:- 'TO FACILITATE THE GENERAL PUBLIC/DEALERS CARRYING GOODS AND CROSSING THE BARRIERS ESTABLISHED BY THE STATE GOVT AND ALSO TO DIFFUSE AWARENESS AMONGST THE GENERAL PUBLIC/DEALERS ABOUT THE SALES TAX LAWS. TO UTILISE THE INFORMATION TECHNOLOGY FOR DEEPER SY STEMATIC REFORMS IN TAX ADMINISTRATION BY CREATION OF A SEPARATE ENTITY PRO PERLY GEARED TO PROVIDE SUPPORTIVE ROLE TO THE DEPARTMENT IN CREATI ON OF DATA BANK 22 (DEALER WISE/COMMODITY WISE. CIRCLE WISE AND BARRIE R WISE) IN TRANSMISSION OF INFORMATION AND ESTABLISHMENT OF CLIENT SERVER E NVIRONMENT. TO BACK UP THE COMPUTERIZATION REQUIREMENT OF THE D EPARTMENT OF EXCISE & TAXATION DEPARTMENT AND FOR THIS PURPOSE DEVELOP INFRASTRUCTURE THEREFORE BOTH IN TERMS OF SOFTWARE AS WELL AS HARD WARE. TO FACILITATE ADOPTION OF STXXVI-A FORM IN A COMPUT ER FRIENDLY FORMAT AND GENERATE FUNDS BY RENDERING THIS SERVICES TO THE DE ALERS SO AS TO MAKE IT A SELF SUSTAINING ACTIVITY. TO EARN OUT ALL SUCH ACTIVITIES AS ARE ENVISAGED IN SECTION 20 OF THE SOCIETY REGISTRATION ACT 1860 WHICH ARE IN THE INTEREST OF SOCIETY. TO DERIVE OPTIMUM BENEFITS FROM FULLY NETWORKED COM PUTERIZATION IN TERMS OF PROVIDING COMPUTERIZED FUNCTIONING OF MULTI-PURP OSE BARRIERS ISSUANCE OF COMPUTERIZED RECEIPTS ON LINE NETWORKING TO FAC ILITATE SHARING OF DATA BETWEEN ALL OFFICES/ASSESSING AUTHORITIES IN THE DE PARTMENT AND DEVELOP OTHER RELATED INFRASTRUCTURES INCIDENTAL THERETO. THE SOCIETY SHALL FOR THIS PURPOSE GENERATE RECEIP TS IN LIEU OF PROVIDING THESE SERVICES AT. THE MULTI-PURPOSES BARRIERS AND UTILI ZE THE SAME TO FULFILL THE OBJECTIVES OF THE SOCIETY. AND IN FURTHERANCE OF THE ABOVE OBJECTIVES: I) DEVELOP CREATE MANAGE AND MAINTAIN INFRASTRUCT URE FOR PROVIDING SUCH SERVICES.' B). THAT PRIMARY FUNDS OF THE SOCIETY WERE 10 BE AU GMENTED BY COLLECTING STATUTORY LEVY AS PER SECTION 34 OF THE H.P. VAT AC T READ WITH RULES 61 AND 62 OF THE H.P VAT RULES IN RESPECT OF DECLARATION TO BE M ADE BY THE DEALERS COMING IN OR GOING OUT OF THE STATE OF HIMACHAL PRADESH IN FO RM ST-XXVI-A AS PER PARA-8 OF THE BYE-LAWS. INITIALLY COST OF PER DECLARATION AS PER THE RULES SET BY THE GOVERNMENT OF HIMACHAL PRADESH WAS RS.5/- AND UPON THE COLLECTION OF THE SAME RS.L/- WAS IMMEDIATELY TO GO TO THE GOVT AND THEREAFTER BY VIRTUE OF BYE- LAWS BEING 10.2 AFTER MEETING OUT EXPENDITURE REMAI NING AMOUNT HAD TO BE TRANSFERRED TO THE STATE GOVERNMENT IN SALES TAX HE AD. PARA-8 AND 10.2 OF THE BYE- LAWS ARE BEING REPRODUCED INFRA FOR YOUR KIND PERUS AL AND READ) REFERENCE:- '8. ACCOUNT OF ST XXV1-A FORM 5. THE COMPUTER GENERATED STXXVI-A FORM BEARING SERIAL NUMBER SHALL BE ISSUED AT THE BARRIER(S) AND THE E.T.O/IN CHARGE BA RRIER SHALL MAINTAIN PROPER ACCOUNT OF THE SAID FORMS UNDER THE SUPERVISION OF CONCERNED ASSISTANT EXCISE AND TAXATION COMMISSIONER OF THE DISTRICT. 6. E.T.O/LN CHARGE BARRIER WILL DEPOSIT RS.L/- PER FOR M (OUT OF THE AMOUNT OF RS.5/- PER FORM AS AT PRESENT OR AS PER RATES PRESC RIBED FROM TIME TO TIME IN RESPECT OF COMPUTERIZED ST-XXVI-A FORM/SERVICES REN DERED)/ IN THE RELEVANT RECEIPT HEAD OF THE DEPARTMENT AS PER PRACTICE HITH ERTO FORE. 7. THE BALANCE AMOUNT AFTER DEPOSITING RS. 1 - PER FOR M WILL BE CREDITED TO THE FUNDS OF THE SOCIETY AND DEPOSITED ON DAY TO DA Y BASIS IN A SAVING BANK ACCOUNT LO BE OPENED IN RESPECT OF EACH BARRIE R(S) WITH THE NEAREST SCHEDULE BANK / COOPERATIVE BANK. 8. KEEPING IN VIEW THE REQUIREMENT OF THE FUNDS THE E XECUTIVE COMMITTEE CAN AUTHORIZE THE ASSISTANT EXCISE AND TA XATION OFFICER / IN CHARGE BARRIER CONCERNED TO INVEST THE AMOUNT IN EX CESS OF THEIR REQUIREMENT IN SHORT TERM DEPOSIT TEST THERE BE ANY LOSS OF INTEREST. 5. NOTWITHSTANDING ANY THING CONTAINED ABOVE THE A MOUNT COLLECTED SHALL BE AVAILABLE FOR BEING UTILIZED IN THE ENTIRE STATE FO R THE PURPOSES SET OUT AND AS' PER APPROVAL OF THE GOVERNING BODY. 23 10.2 AFTER MEETING THE EXPENSES TOWARDS THE OBJECTI VES FOR THE APPROVED PURPOSES LISTED ABOVE AND ACCOUNTING FOR THE LIABIL ITIES ACCRUED AND PROJECTED THE SURPLUS AMOUNT IF ANY SHALL BE DEPOSITED IN T HE RECEIPT HEAD 0040 SALES TAX ON YEARLY BASIS ON APPROVAL OF THE GOVERNING BODY.' 28. ON A COMPREHENSIVE EXAMINATION OF THE PURPOSE OF REGISTERING THE SOCIETY IN THE NAME OF H.P. EXCISE AND TAXATION TEC HNICAL SERVICE AGENCY THE ORGANIZATIONAL STRUCTURE AND CONDUCTING OF ITS FUNC TIONS RULES & REGULATIONS OF THE SOCIETY RECEIPTS & PAYMENT ACCOUNT OF THE SOCI ETY DETAILS OF THE COLLECTIONS ON ACCOUNT OF TAX AND AMOUNTS PAID TO G OVERNMENT RELEVANT PROVISIONS OF H.P. VAT ACT 2005 ESTABLISHMENT OF C HECK POSTS OF BARRIER AND INSPECTION OF GOODS IN TRANSIT THE FOLLOWING POINT S EMERGED AS UNDER : 1. THE CHECKPOST OR BARRIERS AND INSPECTION OF GOOD S IN TRANSIT WERE ESTABLISHED AS PER THE HP VAT ACT 2005. 2. THE ASSESSEE SOCIETY WAS FLOATED TO LOOK AFTER T HE AFFAIRS AND TAX COLLECTION AT THE CHECK POST AND BARRIERS. 3. THE GOVERNING BODY OF THE ASSESSEE SOCIETY CONS ISTS OF CHAIRMAN AND SIX MEMBERS ALONG WITH A MEMBER SECRETARY WHO ARE ALL FROM THE EXCISE AND TAXATION DEPARTMENT EXCEPT A TECHNICAL DIRECTOR FROM NIC AND MD OF ELEC TRONIC DEVELOPMENT CORPORATION WHO MAINLY AID IN PROVIDING REQUIRED INFORMATION TE CHNOLOGY INPUTS. 4. THE EXECUTIVE COMMITTEE OF THE ASSESSEE SOCIETY COMPRISE OF 8 MEMBERS ALONG WITH ONE MEMBER SECRETARY WHO ARE ALL OFFICIALS OF EXCIS E AND TAXATION DEPARTMENT. 5. THE ASSESSEE SOCIETY IS INVOLVED IN COLLECTION A ND DEPOSIT OF RECEIPTS FROM STXXVI-A FORMS. 6. OUT OF THE COLLECTED AMOUNT 20% IS PAID IMMEDIAT ELY TO THE GOVERNMENT. 7. THE REMAINING AMOUNT IS KEPT IN THE SHORT TERM D EPOSITS. 8. THE SURPLUS AMOUNT SHALL BE DEPOSITED IN THE REC EIPT HEAD 0040-SALES TAX ACCOUNT ON YEARLY BASIS. 9. THE ACCOUNTS ARE AUDITED BY THE IFU OF THE SALES TAX DEPARTMENT WHICH WILL COMPILE THE FINAL ACCOUNT THE ADDITIONAL EXCISE AND TAXATION COMMISSIONER(HEAD QUARTER) IS THE AUTHORIZED SIGNATORY. 29. WITH THIS BACKGROUND THE FINANCIAL AFFAIRS OF T HE ASSESSEE SOCIETY ARE EXAMINED. THE INCOME & EXPENDITURE STATEMENT FOR TH E AY 2007-08 ARE AS UNDER: 24 25 30. DURING THE HEARING BEFORE US THE ASSESSEE HAS S UBMITTED THE DETAILS OF PAYMENT OF 20% OF COLLECTIONS WHICH HAVE BEEN DIREC TLY DEPOSITED INTO THE GOVERNMENT TREASURY. THE LD. CIT(A) HAS ALSO ACCEPT ED THE CONTENTION OF THE ASSESSEE THAT 20% OF THE FEES COLLECTED WAS PAID UP FRONT TO THE GOVERNMENT IS NOT AN INCOME. 31. THE ASSESSEE HAS ALSO SUBMITTED THE DETAILS OF PAYMENT OF REMAINING 80% OF THE BALANCE AMOUNT AFTER INCURRING A EXPENDITURE WHICH HAVE BEEN DULY DEPOSITED IN TO THE GOVERNMENT ACCOUNT. THUS TAKIN G THE BALANCE 80% AMOUNT EXCLUDING THE EXPENDITURE OUT OF THE AMBIT OF TAXAT ION. THE FOLLOWING TABLE GIVES THE DETAILS OF AMOUNTS PAID INTO THE GOVERNMENT ACC OUNT. 32. THUS AFTER GOING THROUGH THE ENTIRE AFFAIRS OF THE ASSESSEE WE HOLD THAT THE SURPLUS OF INCOME OVER EXPENDITURE ALSO BELONGS TO THE GOVERNMENT WHICH HAS BEEN DULY DEPOSITED IN THE STATE EXCHEQUER CANNOT B E THE INCOME OF THE ASSESSEE. 33. BEFORE US THE ASSESSEE HAS SUBMITTED STATEMENT REFLECTING THE PAYMENT OF BALANCE AMOUNT OF THE 80% OF THE FEE COLLECTED HAS ALSO BEEN PAID TO THE TREASURY OF THE STATE GOVERNMENT. 34. THE ASSESSING OFFICER IS HEREBY DIRECTED TO EXA MINE THE CHALLANS PAID BY THE ASSESSEE INTO THE GOVERNMENT ACCOUNT UNDER THE RECEIPT HEAD 0040 SALES TAX ACCOUNT AS SUBMITTED BY THE ASSESSEE AND GIVE D UE BENEFIT FOR THE AMOUNTS PAID INTO THE GOVERNMENT EXCHEQUER. 35. GROUND NO. 3 RELATES TO NON ADJUDICATION OF GRO UND NO. 4 FILED BEFORE THE LD. CIT(A). THE GROUND NO. 4 INTER ALIA READS ASUNDER: THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. ASSESSING OFFICER IS NOT JUSTIFIED IN ASSESSING THE APPELLANT AS IT IS NOT A PERSON DEFIN ED UNDER THE INCOME TAX ACT 1961. A.Y TOTAL COLLECTION 20% DIRECTLY DEPOSITED INTO GOVT. TREASURY 80% BALANCE AMT. EXPENDITURE IN A.Y REMAINING BALANCE DATE OF DEPOSIT INTO GOVT. HEAD AMOUNT 2007-08 158 80 343.00 31 57 184.00 127 23 159.00 66 58 547.00 60 1 4 612.00 2008-09 174 12 279.00 34 92 358.00 139 19 921.00 87 52 053.00 51 67 868.00 15-06-2006 20 00 000.00 2009-10 183 06 002.00 36 61 130.00 146 44 872.00 122 02 345.00 24 42 527.00 2010-11 393 43 565.00 85 27 214.00 308 16 351.00 148 64 340.00 159 5 2 011.00 2011-12 446 87 418.00 89 42 065.00 357 45 353.00 163 54 105.00 193 91 248.00 2013-14 653 01 701.00 111 70 027.00 541 31 674.00 163 21 261.00 378 10 413.00 TOTAL 2009 31 308.00 389 49 978.00 1619 81 330.00 751 52 651.00 868 28 679.00 13-02-2014 620 72 946.00 09- 12-2014 300 00 000.00 26 36. BEFORE US NO ARGUMENTS HAVE BEEN TAKEN BY THE A SSESSEE PERTAINING TO THIS GROUND. HENCE THIS GROUND OF APPEAL IS BEING DISMISSED. 37. AS A RESULT THE APPEALS OF THE ASSESSEE ARE PAR TLY ALLOWED AND THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/11/2017. SD/- SD/- (DIVA SINGH) (B.R.R.KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30/11/2017 AG COPY TO: THE ASSESSEE THE RESPONDENT THE CIT THE CIT(A) THE DR