IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER THURSDAY, THE 6TH NOVEMBER 2008 / 15TH KARTHIKA 1930 ST.Rev..No. 126 of 2006 ------------------------------- TA278/2005 of S.T.A.TRIBUNAL,ADDL.BENCH,KOZHIKODE. .................... PETITIONER/APPELLANT/ASSESSEE: ---------------------------------------------------- M/S.AYSHA TIMER YARD, TIMER DEALER, KUTHUPARAMBA, REP. BY ITS MANAGING PARTNER, SRI. K.A.AHAMMED HAJI. BY ADV. SRI.T.M.SREEDHARAN SMT.C.K.SHERIN RESPONDENT/RESONDENT/ REVENUE: -------------------------------------------------------- STATE OF KERALA, REPRSENTED BY THE CHIEF SECRETARY TO GOVERNMENT, SECRETARIAT, THIRUVANANTHAPURAM. SENIOR GOVRNMENT PLEADER SRI. MUHAMMED RAFIQ THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 06/11/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: H.L.DATTU, C.J. & A.K.BASHEER, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - S.T. Rev.No.126 OF 2006 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 6th day of November, 2008 O R D E R H.L.DATTU, C.J. The order passed by the Kerala Sales Tax Appellate Tribunal, Additional Bench, Kozhikode in T.A.No.278/2004 dated 31.1.2006 is the subject matter of this revision petition filed under Section 41 of the Kerala General Sales Tax Act (the “Act” for short). The parameters of the revisional jurisdiction of this Court are well defined. This Court can entertain a revision petition, provided the appellate tribunal has erroneously decided any questions of law or has failed to decide any questions of law or when the findings of the Tribunal are perverse. (2) The relevant assessment year is 2002-03. The assessee is carrying on the business in timber. The Inspecting Wing of the Sales Tax Department had effected two inspections. The first one was on 16.8.2002 and the second one was on 30.11.2002. On the first date of inspection, the inspecting officer had noticed that the assessee had not maintained the regular books of accounts such as day book, stock registers etc. On the second date of inspection on 30.11.2002, the inspecting authority had verified the stocks and had come to the conclusion that there was shortage of stocks. On both these 2 S.T.Rev.No.126/06 occasions, the assessee had compounded the offence departmentally in lieu of prosecution proceedings. (3) The assessee had filed its annual return for the assessment year 2002-03. The assessing authority in view of the reports of the intelligence wing of the department dated 16.8.2002 and 30.11.2002, after rejecting the books of accounts and the return filed, had issued a pre- assessment notice and on the defects pointed out by the investigating wing of the department on two occasions, it was proposed to make certain additions to the conceded turn over. (4) After receipt of the pre-assessment notice, the assessee had filed its objection. The assessing authority after consideration of the objection, had proceeded to pass the best judgment assessment dated 31.1.2004, making an addition of Rs.4 lakhs to the conceded turn over. The addition so made was towards probable omission and suppression made by the dealer. (5) In the appeal filed, the appellate authority has modified the additions so made by the assessing authority, by reducing it from Rs. 4 lakhs to 3.27 lakhs. (6) The order so passed by the first appellate authority was the subject matter of the appeal before the Tribunal in T.A.No.278/2004. The Tribunal, after noticing all the contentions raised by the assessee, had come to the 3 S.T.Rev.No.126/06 conclusion, that since the assessee had not maintained the books of accounts, stock register etc and also noticing that two shop inspections were done in both the occasions, and since the assessee had compounded the offence departmentally in lieu of the prosecution, has proceeded to sustain the order passed by the first appellate authority. (7) The assessee, in the revision petition filed against the orders passed by the Tribunal in T.A.No.278/2004, has framed the following questions of law for our consideration and decision. They are as under: a) Whether on the facts and circumstances of the case, the Appellate Tribunal is justified in sustaining the addition of Rs.3,27,840/- based on the inspection held on 16.8.2004 and 30.11.2003 when the alleged variation in he stock is negligible. And compared to the quantity and value, in sustaining the addition of three times of the alleged suppression when the inspection was almost eight months after commencement of the Assessment Year? b) Whether on he facts and circumstances of the case the Appellate Tribunal is justified in confirming the levy of Tax at 12% on the turnover enhanced in the Assessment Order when the major part of the turnover as per the account is Taxable a t 2% and 3%? c) Whether on he facts and circumstances of the case the Appellate Tribunal is justified in sustaining the levy of penal interest, which is contrary to the decision in Maruti Wire Industry's Case (9 KTR 2003) and the decision in P.K. Damodaran Vs. State of Kerala 4 S.T.Rev.No.126/06 (12 KTR 133)? d) Is the order of the Appellate Tribunal legal, valid and sustainable in law? (8) Sri. Narayanan, the learned counsel appearing for the assessee would vehemently contend that the addition made by the assessing authority is excessive, arbitrary etc. Secondly, it is contended that the assessing authority was not justified in levying penal interest under Section 23(3) of the Act in view of the decision of the Apex Court in Maruthi Wire Industries' case. Lastly it is contended that the assessing authority was not justified in levying tax at 12% on the turnover enhanced in the assessment order when the major part of the turnover as per the account is taxable at 2% and 3%. (9) The assessment order passed by the appellate authority is on estimation basis. It is not in dispute that the intelligence wing of the department on two occasions had inspected the business premises of the assessee. On the first occasion, the inspecting wing had found that the assessee had not maintained the stock register. The assessee is expected to maintain day book, stock register etc and that is a requirement under Rule 32 of the K.G.S.T Rules. Since the assessee had not maintained the stock register, day book etc., he has compounded the offence departmentally. In the second 5 S.T.Rev.No.126/06 inspection dated 30.11.2002, the inspecting officer is of the opinion that there is stock variation. Keeping in view of these two inspections, the assessing authority had proceeded to pass the best judgment assessment and has made certain additions. The findings of the assessing authority is sustained both by the first appellate authority and the tribunal. That only means there is concurrent findings on facts by all the authorities under the Act. (10) In a petition filed under Section 41 of the Act, this Court will only interfere with the orders passed by the tribunal if the tribunal has decided the question of law erroneously or has failed to decide the question of law or if the findings on facts is perverse. In the instant case, the decision is based by the Appellate Tribunal is purely on appreciation of facts and the petitioner has not pointed any perversity in the finding of facts by the tribunal. Therefore inference with the said order is not called for. Accordingly, revision petition requires to be rejected and it is rejected. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER) JUDGE cl/dk 6 S.T.Rev.No.126/06