THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA T.R.E.V.C.NO.67 OF 2011 29TH September, 2011 BETWEEN: M/S.PACIFIC BEARINGS PVT.LTD., 8, GANESH CHAMBERS, RANIGUNJ X ROADS, SECUNDERABAD – 500 003 .. PETITIONER AND THE STATE OF ANDHRA PRADESH REP. BY THE STATE REP. BEFORE STAT., HYDERABAD ANDHRA PRADESH .. RESPONDENT THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA T.R.E.V.C.NO.67 OF 2011 O R D E R : (PER THE HON’BLE JUSTICE GODA RAGHURAM) This is a revision under section 22(1) r/w Rule 10 of A.P.G.S.T. Rules under A.P.G.S.T. Act, 1957 directed against the order of the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad Bench ( for short STAT) dated 13.5.2011 in T.A.No.928 of 2007, whereby the revision petitioner’s appeal against the revisional orders of Additional Commissioner, Hyderabad dated 2.6.2005 is rejected. The petitioner is a registered dealer under the APGST Act, 1957 and the CST Act, 1956 on the rolls of Commercial Tax Officer, Ramgopalpet Circle, Punjagutta Division, Hyderabad dealing in ball bearings. The Commercial Tax Officer (Int)., No.III, Enforcement Wing inspected the business premises of the petitioner in January, 2011, verified the books of accounts. On physical verification of the accounts and ground stock deficit stock of 32,592 ball bearings was found; estimated the average price for a bearing at Rs.333/-; arrived at the sale cost of Rs.1,08,53,136/- on the deficit stock of 32,592 ball bearings; and made a provisional assessment for the year 2000-01, by the order dated 19.3.2001. Against the provisional assessment order the revision petitioner preferred an appeal to the Appellate Deputy Commissioner (CT). By the order dated 25.06.2001 the appellate authority set aside the provisional assessment order and remanded the matter for assessment denovo. The appellate authority recorded that apparently the assessee did not have access to the vigilance verification records kept in custody of the Investigating Officer; that the stock inventory recorded in the 29 sheets produced by the appellate authority reveals that the appellant held 34,580 ball bearings and therefore it is assumed that the revision petitioner could not rebut the matter relating to the stock by bringing it to the notice of the Investigating Officer at the time of inspection. Accordingly, the appellate authority directed the assessing authority to redo the assessment after considering the stock inventory noted in the 29 sheets and other records available with the Investigating Officer and taking into consideration the audit report of the Chartered Accountant while finalizing the assessment and also granted permission to the revision petitioner to peruse the records. Thereafter, the Assessing Officer passed the final assessment order dated 2.7.2002 concluding that the shortage of ball bearings was only to an extent of 631 numbers. The final assessment order relied on the records viz., the sale invoice and other records furnished by the assessee. Despite the appellate authority specifically directing the assessing authority to consider the stock inventory noted in 29 sheets and other records kept by the Investigating Officer as part of the records, which were required to be considered along with the audit report of the Chartered Accountant, the final assessment order dated 2.7.2002 does not disclose consideration by the assessing authority with regard to the relative weight that should be apportioned to the report of the inventories vis-à-vis the Chartered Accountant report, in assessing whether the shortage was to the extent of 631 ball bearings. Exercising revisional power under section 20(2) of A.P.G.S.T. Act, 1957 the Additional Commissioner by the order dated 2.6.2005 concluded that the final assessment order dated 7.7.2002 was prejudicial to the interest of Revenue and revised the assessment recording that the Chartered Accountant’s report and the accompanying statement filed under Rule 7 prima facie reduces the total turn over for the entire year to Rs.2,08,97,349/- against the total turn over of Rs.2,64,33,570/- arrived at by the inspecting authority; that the Chartered Accountant’s report is false and incorrect as it neither explains the reasons for downscaling the total turnover nor explains as to how 32,592 ball bearings recorded in the ground stocks and accepted by the assessee at the time of inspection was reduced to 631 bearings, as adopted in the final assessment order. The revisional authority for these reasons concluded that the Chartered Accountant’s report filed under Rule 17 is unreliable, rejected the same and on a further inference from the discrepancies between the verification report and the Chartered Accountant’s report concluded that as the assessee/revision petitioner herein could not establish how the deficit occurred. The revisional authority accordingly rejected the assesse’s plea, set aside the order of the assessing authority, and instructed the assessing authority to pass orders afresh based on the inspection material and having due regard to the findings of the inspecting authority. Aggrieved by the revisional order dated 2.4.2005 the petitioner preferred an appeal to the learned Tribunal, which by the order impugned herein declined to interfere and dismissed the appeal. The learned Tribunal concluded that in exercise of the revisional power vesting under section 20(2) of APGST Act, 1957 which is supervisory in nature and is intended to ensure that subordinates discharge functions in accordance with the prescriptions of the statute, the Additional Commissioner exercised the revisional power within the contours of the powers of revision and revised the final assessment order on the ground that the inspection material compared by the enforcement wing clearly indicates deficit stock of 32,592 ball bearings and this material has not been rationally considered in the final assessment order and the assessing authority arrived at a deficit stock of 631 ball bearings erroneously by accepting the turn over as correct and complete, that too even without referring or analyzing the inspection reports of the enforcement wing. In the facts and circumstances, we find no error in the application of law or exercise of discretion either by the revisional authority in passing the order dated 2.6.2005 or by the learned STAT in rejecting the appeal of the petitioner in T.A.No.928 of 2007. In conformity with the revisional order, the assessing authority would now consider the entire material, in particular the verification reports and data available from the enforcement wing, verification of the business premises of the petitioner and the physical verification of the stock on ground, as directed in the revisional order dated 2.6.2005. On the aforesaid analysis, this revision is without merits and is accordingly dismissed at the admission stage. _________________ GODA RAGHURAM, J 29th September, 2011. _________________ B.N.RAO NALLA, J TNB THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA T.R.E.V.C.NO.67 OF 2011 O R D E R : (PER THE HON’BLE SRI JUSTICE GODA RAGHURAM) 29TH September, 2011. tnb