Reserved on : 03.09.2026 Delivered on :15.09.2026 HIGH COURT OF JUDICATURE AT ALLAHABAD SALES/TRADE TAX REVISION No. - 73 of 2015 The Commissioner Commercial Tax Lko. …..Revisionist(s) Versus S/S Kanohar Electricals Ltd. …..Opposite Party(s) Counsel for Revisionist(s) : S.C., S.c.. Counsel for Opposite Party(s) : Suyash Agarwal Court No. - 7 HON'BLE PIYUSH AGRAWAL, J. 1. Heard Sri Bipin Kumar Pandey, learned Chief Standing Counsel for the revisionist and Sri Rakesh Ranjan Agarwal, learned Senior Advocate assisted by Sri Suyash Agarwal, learned counsel for opposite party. 2. The present revision has been filed against the order dated 30.08.2014 passed by the Commercial Tax Tribunal, Meerut in Second Appeal No. 207 of 2013 for Assessment Year 2009-10 arising out of proceedings initiated under U.P. V.A.T. Act. The present revision was admitted by this Court vide order dated 10.03.2015 on the following question of law: “(I) Whether under the facts and circumstances of the case, the Commercial Tax Tribunal was legally justified in allowing the exemption non the amount of credit as claimed by the dealer whereas the sale invoice did not disclose any credit amount rather the same was received after completion of the sale transaction?” 3. Learned counsel for the revisionist submits that the respondent is carrying on the business of manufacture and sale of transformers and its parts. While framing the assessment order, the claim of exemption in respect of the credit note was rejected by the Assessing Authority, against which a first appeal was filed, which was dismissed. Thereafter, 2 STRE No. - 73 of 2015 the respondent filed a second appeal, which has been allowed contrary to the provisions of the Act. 4. Learned Additional Chief Standing Counsel submits that the Tribunal, being the last court of fact, without verifying or reversing the findings of fact recorded by the Assessing Authority and confirmed by the first appellate authority, has allowed the appeal. He further submits that, as per Section 21 read with sub-Rules 14 and 15, the respondent, after issuing a credit note to the purchasing dealer, was required to obtain a debit note from the purchaser and the same ought to have been shown in the next quarterly or monthly return, as the case may be. However, the Tribunal, without recording any finding in this regard, has allowed the revision. 5. Per contra, Shri Rakesh Ranjan, learned Senior Counsel for the respondent supports the impugned order and submits that the benefit of credit note has rightly been allowed. If the same is not allowed, the amounts to double levied which is never intent of the provision of the UP VAT Act. He further submits that the Tribunal being a last court of fact and law has recorded a finding of fact in the favor of respondent holding that the rate was fixed by the Indian Technical and Industrial Manufacture Association fixes the rate which is fixed letter after the issuance of invoice. 6. In support of his submission, he relies upon the judgment of this Court in the case of M/s Parishudh Machines (P) Ltd. Ghaziabad v. Commissioner of Trade Tax, U.P., Lucknow, 2007 NTN (Vol. 34)– 276; Commissioner, Commercial Tax, U.P. Lko., v. Kesho Ram and Sons, Ahmad Bagh, Saharanpur, 2015 NTN (Vol. 58)-355; and The Commissioner Commercial Tax v. M/S Ashish Traders v. M/S Ashish Traders, passed in Sales/Trade Tax Revision Defective No.127 of 2014 decided on 08.12.2014 and further, he relies upon the circular dated 16.07.2012 issued by Commissioner of Commercial Tax and submits that no RITC can be done where the rate note has been issued. He 3 STRE No. - 73 of 2015 further submits that the circular of binding upon the department authorities, he praised for dismissal of the revision. 7. Rebutting the said submission, learned Additional Chief Standing Counsel submits that the present case does not pertain to RITC and, therefore, the benefit of the circular cannot be extended to the respondent. 8. After hearing the learned counsel for parties, Court has perused the record. 9. The record shows that, while framing the assessment order, the Assessing Authority specifically recorded a finding that, after issuance of the credit note, no debit note had been obtained from the purchasing dealer as required under Section 21 read with sub-Rules 14 and 15 nor was the same reflected in the subsequent monthly or quarterly returns. Therefore, the benefit of the credit note was not accorded to the respondent. 10. The said finding was affirmed by the first appellate authority. In the second appeal, however, the Tribunal, for the first time, accepted the version of the respondent-dealer, holding that “ व्यापारी द्वारी के ताओं से बिके के सेम्न्ध में जो सेबिदायें के गयें है उनपारी बिचारी केरीन पारी येंहै पायें गयें बिके बिके हैता! बिनध"रिरीता शता% में एके शता" येंहै थी बिके मेंल के केमेंता इंबि*येंन इंलक्ट्रि,-के ए इंल,-बिनके मेंन्यें!फै ,चारिंरी0ग एसेशिशयेंशन द्वारी बिनध"रिरीता मेंनके / फैमें2"ल के अन!सेरी हैग। इंसे प्रकेरी से बिल जोरी केरीता सेमेंयें मेंल के स्ताबिके में2ल्य तायें नहै8 हुओं थी, क्ट्रि:के दा में तायें हुओं है। इंसे प्रबि;यें के एकेउन्ट फैरी केरीन हैता! के बि*ट नट=से जोरी हुओं। अता> स्पाष्ट है बिके मेंल के बिके में2ल्य बिल में अबिकेता में2ल्य में ; बि*ट नट=से के सेमेंयेंजोन के उपारीन्ता जो रीशिश प्रप्ता हैग, ” है बिके में2ल्य हैग। . 11. Further, the Tribunal has recorded that the petitioner had entered into an agreement with its purchaser, on the basis of which the rate was to be determined at a later stage. The said fact was brought forward by the respondent for the first time before the Tribunal. Neither the date of the alleged agreement has been mentioned nor has any material been brought on record to show how the rate was to be determined under the said agreement. Further, the record does not disclose when the credit note was issued or whether any debit note was received from the purchaser as required under Section 21 read with sub-Rules 14 and 15. 4 STRE No. - 73 of 2015 The Tribunal has also failed to record any finding as to whether the dealer had disclosed the said fact and the issuance of the credit note in the subsequent returns. In the absence of compliance with these vital requirements prescribed under the provisions of the Act, the Tribunal was not justified in allowing the claim of the respondent-dealer in respect of the credit note. 12. In view of the peculiar facts stated above, the judgment relied upon by the respondent is of no aid to it. Furthermore, the circular issued by the Commissioner is also of no aid to the respondent, as the present case does not relate to RITC. The circular specifically stipulates that where the amount of tax has been deposited and no benefit is derived from the issuance of a credit note, proceedings for RITC should not be initiated. Since the issue at hand does not concern RITC, the said circular does not aid the respondent dealer. 13. The Tribunal, being the final court of fact, ought to have set aside the findings of the assessing authority as well as the first appellate authority. Without reversing the findings of fact recorded against the dealer, the impugned order cannot be sustained. 14. In view of above, the revision is allowed. The impugned order is set aside. 15. The substantial question of law is answered accordingly in favour of the revisionist and against the opposite party. (Piyush Agrawal,J.) September 15, 2026 A.N. Mishra Digitally signed by :- AMARNATH MISHRA High Court of Judicature at Allahabad