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 WEDNESDAY, THE 3RD SEPTEMBER 2008 / 12TH BHADRA 1930 ST.Rev..No. 317 of 2005 ------------------------------ TA.1145/2003 of S.T.A.T.ADDL.BENCH,ERNAKULAM .................... REVN.PETITIONER/APPELLANT/ASSESSEE: ------------------------------------------------------------- T.V.KUNJUMON, PRINCE FANCY STORES, MATHER BAZAR, ERNAKULAM. BY ADV. SRI.K.M.FIROZ DR.K.B.MUHAMMED KUTTY, SR. RESPONDENT: RESPONDENT/REVENUE: --------------------------------------------------------- THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. BY SR.GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ. THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 03/09/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: H.L.DATTU, C.J. & A.K.BASHEER, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - S.T.Rev.No.317 OF 2005 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 3rd day of September, 2008 ORDER H.L.DATTU, C.J. This revision petition pertains to the assessment year 1997-1998. 2. The assessee, a dealer registered under the provisions of Kerala General Sales Tax Act (for short 'Act'), has called in question the legality or otherwise of the orders passed by the Sales Tax Appellate Tribunal in T.A.No.1145/03, dated 25-6-2004. By the impugned order, the Tribunal has confirmed the orders passed by the First Appellate Authority. 3. The assessing authority initially had completed proceedings under Section 17(4) of the Act for the assessment year 1997-1998. 4. The assessing authority after completion of the assessment proceedings had received certain information from the Intelligence Officer of the Department in regard to to certain purchases both intra and inter-State sales but not reflected in the books of account maintained in the regular course of business and also had received check post declarations which had not been accounted by the assessee at the time of scrutiny of the assessment records while passing assessment orders under Section 17(4) of the Act. 5. The Intelligence Officer of the department, after holding an enquiry, has passed an order under Section 45A of the Act imposing a penalty of Rs.73,460/- for the offences said to have been committed by the petitioner under Section 45A of the Act. The orders passed by the Intelligence Officer is modified by the Deputy Commissioner of S.T.Rev.No.317 OF 2005 :: 2 :: Commercial Taxes in the revision petition filed by the assessee. 6. After all these proceedings, the assessing authority has initiated proceedings by issuing a notice under Section 19 of the Act. The notice came to be replied by the assessee and, thereafter, the assessing authority, making use of the check post declarations, the information received by the Intelligence Department and after his own verification, has come to the conclusion that the assessee is a regular defaulter in the sense, a dealer who is a habitual offender in suppressing the purchase turn overs in his account books. The assessing authority has observed this aspect of the matter in his assessment order wherein he has stated, the scrutiny of the assessment records show that the assessee is regularly practicing purchase suppression and such cases were detected and utilised for assessment proceedings on almost all years. For the year 1997-1998, even the assessment order was revised once consequent on detection of purchase suppression. The contention is therefore rejected. (emphasis supplied by us) 7. While completing the re-assessment proceedings, the assessing authority has made certain addition to the total and taxable turnover conceded by the assessee. 8. Aggrieved by the re-asssessment order so passed, the assessee had filed an appeal before the First Appellate Authority in S.T.A.No.979/03. The First Appellate Authority has modified the assessment order by its order, dated 25-7-2003 and in that has directed the assessing authority to make an addition of the actual suppression detected by the concerned authorities, namely, the check post authorities and the Intelligence Officer of the Department. 9. Aggrieved by the orders so passed by the First Appellate Authority, the assessee as well as the Revenue had carried the matter by filing Second Appeal before the S.T.Rev.No.317 OF 2005 :: 3 :: Sales Tax Appellate Tribunal in T.A.No.1145/03 and 22/04 respectively. The Tribunal by its order, dated 25-6-2004 has rejected the appeals filed by the assessee as well as by the Revenue. Aggrieved by the orders so passed, the assessee is before us in this revision petition and the State has accepted the verdict of the Tribunal. 10. We have carefully heard Dr.K.B.Muhammed Kutty, learned Senior Counsel appearing for the assessee, who submits that the orders passed by the authorities under the Act and the Sales Tax Appellate Tribunal are arbitrary and capricious. 11. Sri. Mohammed Rafiq, learned counsel for the revenue ably justified the impugned order passed by the Tribunal. 12. The assessing authority had accepted the returns filed by the assessee and accordingly passed an order under Section 17(4) of the Act. It is only after receiving the information from the check post authorities and also the Intelligence Officer of the Department, has initiated re-assessment proceedings and an opportunity of hearing was given to the assessee to rebut the omissions pointed out in the notice issued for the purpose of re-assessment. 13. The assessee had filed its reply and in that had denied the allegation made in the notice and further has requested to drop the proceedings.. 14. The assessing authority, after considering the reply so filed and in view of the check post declarations and the report of the Intelligence Officer of the Department, has come to the conclusion that the assessee has suppressed the purchase turn over and, accordingly, has made certain additions towards the conceded turn over. 15. The fact of suppression of purchase is accepted by the First Appellate Authority as well as by the Tribunal. But taking into consideration the plea of the S.T.Rev.No.317 OF 2005 :: 4 :: assessee, have modified the orders passed by the assessing authority by directing the assessing authority to make an addition of the actual suppression detected by the Intelligence Officer of the Department and the check post authority. 16. In our opinion, the orders passed by the authorities are purely based on facts. All the authorities under the Act have given cogent reasons for accepting the re-assessment orders passed by the assessing authority. Since we are of the opinion that the decision of the authorities under the Act is purely based on facts, in our opinion, interference with the orders passed in exercise of powers under Section 41 of the Act is fully unwarranted. 17. In that view of the matter, while rejecting this revision petition, we answer the questions of law raised by the assessee against the assessee and in favour of the Revenue. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER) JUDGE jes/dk