IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER MONDAY, THE 18TH AUGUST 2008 / 27TH SRAVANA 1930 S.T.Rev.No.19 of 2006 ---------------------------------------- (ORDER DATED 29-3-2005 IN T.A.No.340/2000 OF KERALA AGRICULTURAL INCOME TAX AND SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, KOTTAYAM) (ASSESSMENT YEAR 1996-1997) .................... REVISION PETITIONER: ASSESSEE/RESPONDENT:- ----------------------------------------------------------------------------- M/S.ALAPPATTU AGENCIES, THODUPUZHA. BY ADV. SRI.E.P.GOVINDAN RESPONDENT: REVENUE/APPELLANT:- ----------------------------------------------------------- STATE OF KERALA, REPRESENTED BY THE SECRETARY, TAXES DEPARTMENT, GOVERNMENT SECRETARIAT, TRIVANDRUM. BY SENIOR GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ. THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 18/08/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: H.L.Dattu,C.J. & A.K.Basheer,J. -------------------------------------------- S.T.Rev.No.19 of 2006 -------------------------------------------- Dated, this the 18th day of August, 2008 ORDER H.L.Dattu,C.J. A simple issue is made more complicated by the learned counsel appearing for the assessee. 2. The best judgment assessment is completed by the assessing authority for the assessment year 1996-97. Aggrieved by a portion of the orders passed by the assessing authority, the assessee had filed the first appeal before the first appellate authority. Before the first appellate authority, it was the specific stand of the assessee that he has 13 originals of the delivery note issued by the Department and for balance of the delivery note, he has got only duplicate copies, which were secured from the transporters. 3. The first appellate authority, while considering this issue, has stated in his order that the duplicate delivery notes that is produced by the assessee before him has more weight than the original delivery notes and, accordingly had set aside the assessment order and further has remanded the matter to the assessing authority to redo the matter in the light of the findings and conclusions reached by him. S.T.Rev.19 of 2006 - 2 - 4. State, being aggrieved by the aforesaid order passed by the first appellate authority, has carried the matter by way of second appeal before the Tribunal in T.A.No.340 of 2000. The Tribunal, in our opinion, rightly understanding the purport of sub-rule (18) of Rule 32 of the Kerala General Sales Tax Rules, 1963 (“KGST Rules” for short), has set aside the orders passed by the first appellate authority. It is the correctness or otherwise of the said order passed by the Tribunal is the subject matter of this revision petition. 5. The petitioner has framed the following questions of law for our consideration and decision. They are as under: “(i) Whether on the facts and in the circumstances of the case the Tribunal was justified in reversing the findings of the first appellate authority. (ii) Whether on the facts and in the circumstances of the case the Tribunal was justified in sustaining the addition made by the assessing authority on the ground of non production of delivery notes. (iii) Whether on the facts and in the circumstances of the case the Tribunal was justified in not arriving a finding to the effect that the petitioners have not suppressed any turnover. (iv) Whether on the facts and in the circumstances of the case the Tribunal was justified in ignoring Annexure-E revised assessment order passed by the S.T.Rev.19 of 2006 - 3 - assessing authority. Has not the Tribunal committee an error in appreciating the facts on records?” 6. At the time of hearing of this revision petition, the learned counsel appearing for the assessee would submit, that, the Tribunal was not justified in interfering with the remand order passed by the first appellate authority and, secondly, would submit that in view of the decision of this Court in the case of SIV Industries Limited vs. State of Kerala [(2004) 12 KTR 591 (Ker.) - S.T.Rev.No.48 of 2003 disposed of on 11.08.2003], the Tribunal was not justified in interfering with the orders passed by the first appellate authority. 7. At the outset, we would like to observe that we do not know how the orders passed by a Division Bench of this Court would even come to the aid of the petitioner. That was a case where this Court was of the opinion that merely because the delivery notes had been misplaced or had been lost by an assessee itself is not a ground that the assessee had used the said delivery notes either for unaccounted purchases or for unaccounted sales of the goods. 8. In the instant case, we are not concerned with either missing or misplacing the delivery notes supplied by the Department. In fact, we are only concerned with the construction that requires to be placed on sub-rule (18) of Rule 32 of the KGST Rules. S.T.Rev.19 of 2006 - 4 - 9. The assessee, in the present case, has a Branch Office at Adimaly. According to him, he had supplied or despatched goods to its Branch Office by using 68 delivery notes. The assessee did not produce the original of the delivery notes before the assessing authority nor the transporter's copy. Therefore, the assessing authority was of the view that the goods supplied by using the 68 delivery notes is only the sales and not branch transfer as claimed by the assessee. In the appeal filed before the first appellate authority, the assessee had produced only 13 original copies of the delivery notes, 28 transport copies of the transporter and for the balance, he had neither produced the original delivery notes nor the transporter's copy. However, had produced the books of accounts maintained by the consignee, who is none other than the Branch Office of the consignor. 10. The first appellate authority, being of the opinion that the duplicate copies said to have been produced by the assessee has more value than the originals, had remanded the matter to the assessing authority to pass a fresh order in the light of the observations made by him. The order, in our opinion, is very curious order and, therefore, the Revenue was justified in taking up the matter before the Tribunal for its consideration and decision. S.T.Rev.19 of 2006 - 5 - 11. The Tribunal, keeping in view sub-rule (18) of Rule 32 of the KGST Rules, has cancelled/modified the orders passed by the first appellate authority. 12. Now, we shall refer to sub-rule (18) of Rule 32 of the KGST Rules. Sub-rule (18) reads as under: “(18) Every such delivery note shall be prepared in triplicate, the duplicate and triplicate being carbon copies of the original serially machine numbered shall be kept in book form and shall be duly signed and dated by the consigning dealer or his manager or authorised agent and the original of it shall be furnished to the assessing authority concerned, the duplicate shall be retained by the purchasing dealer or the person to whom the goods are delivered for transporting and the triplicate shall be retained by the consigning dealer”. 13. The possible construction that could be placed on sub-rule (18) is as under: A consignor can despatch his goods to his Branch Office/Godown etc., by using delivery notes as prescribed under sub-rule (18) of Rule 32 of the KGST Rules. The form that is prescribed under the KGST Rules is Form No.26. The consignor is expected to prepare triplicate copies of the delivery notes, which the dealer would secure from the Department. The original of the delivery note requires to be deposited by the consignor with the assessing authority. The duplicate S.T.Rev.19 of 2006 - 6 - copy should be retained by the purchasing dealer or the person to whom the goods are delivered for transporting and the triplicate copy should be kept by the consignor/assessee. 14. In the instant case, as we have already noticed, it is the case of the assessee that he has transported goods to its Branch Office by using 68 delivery notes. What was produced by the assessee before the first appellate authority, for the first time, is the 13 originals of the delivery note. In fact, the originals of the delivery notes should have been deposited by the consignor with the assessing authority. We do not intend to comment on that aspect of the matter. Apart from this, for the balance of the transaction what was produced by the assessee before the first appellate authority is only the transporter's copy, viz., the duplicate copy of the delivery note. 15. Since the orders passed by the first appellate authority was contrary to the statutory provisions, the Tribunal, in our opinion, has rightly interfered with the orders passed by the first appellate authority and, thereafter has set aside the said order. 16. Since the assessee has already produced 13 originals of the delivery note, in our opinion, in the interest of justice, the matter requires to go back to the assessing authority. The assessing authority will now consider those 13 originals and grant whatever relief that the S.T.Rev.19 of 2006 - 7 - assessee is entitled to. 17. With these observations, the revision petition is disposed of. 18. I.A.No.334 of 2006 is dismissed. Ordered accordingly. H.L.Dattu Chief Justice A.K.Basheer Judge vku/DK