IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN WEDNESDAY, THE 8TH JUNE 2011 / 18TH JYAISHTA 1933 ST.Rev..No. 254 of 2010() ------------------------- (TA.168/2009 OF THE KERALA SALES TAX APPELLATE TRIBUNAL, ADDL.BENCH, KOTTAYAM) .................... REVISION PETITIONER/APPELLANT: --------------------------------------- GEORGE.C.MUTHOLY,PROPRIETOR, NATIONAL TRADERS,RUBBER TRADERS,ELIKKULAM, KOTTAYAM DISTRICT. BY ADV. DR.K.B.MUHAMED KUTTY, SENIOR ADVOCATE SRI.BOBBY JOHN RESPONDENT/RESPONDENT: ------------------------------- STATE OF KERALA,REPRESENTED BY THE SECRETARY TO GOVERNMENT,COMMERCIAL TAX DEPARTMENT, SECRETARIAT,THIRUVANANTHAPURAM. GOVERNMENT PLEADER SRI. MOHAMMED RAFEEQ THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 08/06/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: S.T. REV. 254/2010 APPENDIX ANNEXURES: ANNEXURE-1 : TRUE COPY OF THE ASSESSMENT ORDER DATED 31.3.2008 PASSED BY THE ASST. COMMISSIONER, COMMERCIAL TAXES, KOTTAYAM. ANNEXURE-II : TRUE COPY OF THE 1ST APPELLATE ORDER DATED 19.3.2008 PASSED BY THE DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, KOLLAM. ANNEXURE-III : TRUE COPY OF THE SECOND APPEAL DATED 14.7.2009 FILED BY THE PETITIONER BEFORE KERALA SALES TAX APPELLATE TRIBUNAL ADDITIONAL BENCH, KOTTAYAM. ANNEXURE-IV : TRUE COPY OF THE APPELLATE ORDER DATED 30.1.10 IN T.A. NO. 168/2009, PASSED BY KERALA SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, KOTTAAM. ANNEXURE-V : TRUE COPY OF FORM 25 DECLARATION ISSUED BY T.S. MOHAMMED BHASHEER TO THE PETITIONER. ANNEXURE-VI : TRUE COPY OF FORM 25 DECLARATION ISSUED BY V.M. ABDUL SALAM TO THE PETITIONER. ANNEXURE-VII : TRUE COPY OF FORM 25 DECLARATION ISSUED BY V.S. AJMAL KHAN TO THE PETITIONER. ANNEXURE-VIII : TRUE COPY OF FORM 25 DECLARATION ISSUED BY M/S. NIBSON TRADERS TO THE PETITIONER. ANNEXURE-IX : TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 7 OF THE K.R.R. ACT. ANNEXURE-X : TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 34 OF THE K.R.R. ACT. ANNEXURE-XI : TRUE COPY OF THE APPLICATION DATED 27.12.2010 FILED BY THE PETITIONER TO THE PUBLIC INFORMATION OFFICER / COMMERCIAL TAX OFFIC ER PONKUNNAM. ANNEXURE-XII : TRUE COPY OF THE LETTER DATED 5.1.2011 ISSUED BY THE PUBLIC INFORMATION OFFICER / COMMERCIAL TAX OFFIC ER, PONKUNNAM TO THE PETITIONER. ANNEXURE-XIII : TRUE COPY OF THE INTIMATION DATED 6.1.2011 FROM DEPUTY TAHSILDAR (RR), KANJIRAPPALLY TO THE PETITIONER. RESPONDENTS' ANNEXURES -- NIL. // TRUE COPY // P.S. TO JUDGE. KNC/- C.N. RAMACHANDRAN NAIR & P.S. GOPINATHAN, JJ. = = = = = = = = = = = S.T. Rev. No. 254 OF 2010 = = = = = = = = = = = = = DATED THIS, THE 8TH DAY OF JUNE, 2011. O R D E R C.N. Ramachandran Nair, J. This revision is filed against the order of the Tribunal dismissing the appeal for 2004-05. We heard the Senior Counsel Dr. K.B. Mohammed Kutty, appearing for the revision petitioner and the learned Government Pleader Sri.Mohammad Rafeeq appearing for the State. 2. The revision petitioner was a dealer in rubber during the relevant year, stationed at Elikkulam in Kottayam District. Even though the petitioner issued Form No. 25 for purchase of large quantities of rubber from several parties, he disowned the transactions later. The Tribunal, after close examination of the matter, found that for the purchase for which the petitioner issued Form No. 25, he is liable to pay tax as last purchaser unless he produced Form No. 25 from his buyer. The quantity purchased for which assessment is sustained by the Tribunal is for 24,444 Kgs. of rubber valued at Rs. 28,60,365/- and 8,400 Kgs. of scrap rubber valued at Rs. 3,61,200/-. Even though there is dispute in regard to a further sum of Rs. 52,77,500/-, the Tribunal found that there is apparent proof of sale of the quantity against which Form No. 25 declaration was issued by the dealer S.T.REV. 254/2010 2 namely M/s. Nibson Trades, Kottayam. Therefore, the Tribunal remanded this issue for reconsideration. Besides addition of the above two items sustained, the Tribunal also sustained a further addition of equal amount made by the assessing authority also towards probable omission and suppression. The appellant's case is that there is no justification for making any addition to the turnover. After hearing the counsel on both sides, we do not find any justification to interfere with the findings of the Tribunal with regard to the addition sustained pertaining to the quantities above referred. However, we find force in the contention of the senior counsel for the petitioner that addition of equal amount for probable omission and suppression is without any basis. Even though the learned Government Pleader submitted that when the dealer has denied transaction pertaining to the purchase for which he was issued Form No. 25, there may be case of purchase without issuing any declaration form, having regard to the fact that rubber is a sensitive item, the transport of which is possible only with statutory documents and since documents were there even in respect of other unaccounted transactions, we do not think there is any possibility of any purchase and sale without any document ever being issued. Petitioner is located in the centre of rubber production where probably he can purchase natural rubber from planters. However, it would be rather impossible for the petitioner to transfer goods without any documents S.T.REV. 254/2010 3 whatsoever and petitioner not being a manufacturer of rubber product, admittedly has sold rubber purchased as a trader. The Department has no material to show that petitioner has transported any rubber without documents. We, therefore, feel that addition towards probable omission and suppression is untenable and is not on any sound basis. Petitioner has closed his business long back and even in the penalty case we had showed some leniency. Here again, we notice that the Department has not looked into the financial transactions and source of funds for even unaccounted business. So much so, we feel the addition towards probable suppression and omission is not justified. Accordingly, we allow the revision in part by modifying the order of the Tribunal by deleting the equal amount added towards probable omission and suppression in addition to the assessment of the turnover in respect of the quantities mentioned above. S.T. Rev. is allowed in part as above. C.N. RAMACHANDRAN NAIR, (JUDGE) P.S. GOPINATHAN, (JUDGE) knc/-