IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY MONDAY, THE 7TH MARCH 2011 / 16TH PHALGUNA 1932 ST.Rev..No. 127 of 2010() ------------------------- AGAINST THE ORDER IN TA.372/2009 of THE SALES TAX APPELLATE TRIBUNAL, EKM. DATED 26/09/2009 .................... PETITIONER/APPELLANT/ASSESSEE ------------------------------------------------- BHARAT PETROLEUM CORPORATION LTD., ERNAKULAM. BY ADV. SRI.V.V.ASOKAN SRI.K.S.SAJEEV KUMAR RESPONDENT(S): /RESPONDENT/REVENUE ---------------------- STATE OF KERALA, REP. BY JOINT COMMISSIONER (LAW), COMMERCIAL TAXES, ERNAKULAM. MR.V.K.SHAMSUDEEN, GOVERNMENT PLEADER THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 07/03/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & BHABANI PRASAD RAY, JJ. ---------------------------------- S.T.Rev. No.127 of 2010 --------------------------------- Dated, this the 7th day of March, 2011 J U D G M E N T Ramachandran Nair, J. This Sales Tax Revision case is filed against the order of the Tribunal confirming the sales tax assessment on the petitioner assessee for the assessment year 2000-2001. 2. We have heard Shri.V.V.Asokan, learned counsel appearing for the petitioner and learned Government Pleader appearing for the State. 3. First question raised is against the addition made to the LPG turn over sustained by the Tribunal for the reason that sale is below the purchase price. Learned counsel for the petitioner rightly pointed out that price of LPG is controlled and so much so, the sale price has to be at prescribed rates. Since LPG is a commodity on which there is price control, the petitioner obviously cannot charge higher price merely because purchase cost is higher. So much so, this issue has to be necessarily found in favour of the petitioner. S.T.Rev.No.127/2010 -2- Accordingly, the first question is answered in favour of the petitioner by deleting estimated gross profit addition at 20% of sales turn over of LPG. In other words, actual sales price should be assessed as turn over of LPG. 4. The next question raised is with regard to lump sum addition of Rs.4 crores on account of probable omissions and suppressions. Learned counsel for the petitioner submitted that the petitioner is a Government of India Company engaged in refining and marketing of its products in the State. Much of the sales is from the Refinary i.e. at the point of production itself. While the case of the Department is that accounts produced are not full and complete and so much so the estimation is called for, the case of the petitioner is that accounts are maintained in a systematic pattern and there is no change in the pattern of maintenance of accounts for the year, and having accepted similar accounts produced for preceding years, the Officer has no justification to reject the accounts and make additions. We do not think there is any justification to assume unaccounted production or sales by the petitioner, which is a Central Government Company. In fact, S.T.Rev.No.127/2010 -3- correctness of the accounts could be tested by verifying the input- output ratio. The petitioner is engaged in import of crude oil, refining the same and selling or stock transferring the products from Kerala. We do not think there is any justification to make addition by assuming that there is unaccounted production or sales. The Assessing Officer cannot make addition by making a statement that accounts are not full and complete. Therefore, we feel the Assessing Officer should reconsider the accounts of the Company meticulously, and if there is no omission in the account, he should exclude the addition made to the returned turn over. Therefore, we direct the petitioner to produce books of accounts before the Assessing Officer and convince the Officer about the correctness and completeness of the accounts. 5. Last question raised pertains to disallowance of concessional rate for want of statutory documents. Learned counsel for the petitioner submitted that the purchaser from the Company turned sick and so much the petitioner could not obtain declaration. We do not think there is any justification to interfere with the Tribunal's order because declaration from the purchaser under S.T.Rev.No.127/2010 -4- notification is a mandatory requirement for granting concession. This question is therefore answered in favour of the State and against the petitioner. In view of the above findings, we allow the revision in part by setting aside the orders of the Tribunal on the first two issues raised and by remanding the matter to the Assessing Officer for verification of the accounts and for making fresh assessment. This Revision case is disposed of. (C.N.RAMACHANDRAN NAIR, JUDGE) (BHABANI PRASAD RAY, JUDGE) jg