IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 27TH MAY 2009 / 6TH JYAISHTA 1931 ST.Rev..No. 298 of 2008() ------------------------- AGAINST THE ORDER IN RP 10/07 IN TA.5/2007 of S.T.A.TRIBUNAL,ADDL.BENCH,PALAKKAD .................... REVISION PETITIONER/RESPONDENT/REVENUE:- ------------------------------------------------------------ STATE OF KERLA REP. BY JOINT COMMISSION (LAW), COMMERCIAL TAXES, ERNAKULAM. BY GOVERNMENT PLEADER SRI. VINOD CHANDRAN RESPONDENT(S): --------------- M/S POLAKULATH TOURIST HOME, KODNGALLUR, THRISSUR. ADV. SMT.S.K.DEVI FOR R1 SRI.M.RAJ MOHAN FOR R1 THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 27/05/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & C. K. ABDUL REHIM, JJ. -------------------------------------------- S. T. Rev. No. 298 OF 2008 -------------------------------------------- Dated this the 27th day of May, 2009 JUDGMENT Ramachandran Nair,J. Revision is filed by the State against the orders of the Tribunal rectifying their earlier appellate order dismissing the appeal filed by the respondent-assessee. Though appeal was dismissed in the first round the Tribunal on rectification reversed their earlier order and allowed the appeal. We have heard Government Pleader appearing for the petitioner and counsel appearing for the respondent. After hearing both sides and on going through the Tribunal's orders, we notice that the Tribunal, though dismissed the appeal in the first round, allowed it in rectification proceedings because their earlier order was found to be contrary to it's own decision in another case and some of the judgments of this Court. Government Pleader pointed out that there was no mistake in the original order and so much so rectification was impermissible. Counsel for the assessee on the other hand contended that the Tribunal had not considered the issues raised when they 2 dismissed the appeal and all what they did was to reconsider the issues based on the decision of this Court and their other decisions. However, we are unable to accept the contention of the assessee because the Tribunal in the first round held in their order as follows: 4. We have analysed the reasons assigned by the officer for rejection of accounts and estimation of turnover and also the contentions raised by the appellant. Though specific instances of suppressions have not been discovered by way of any inspection, the reasons assigned by the assessing authority point to the fact that the accounts maintained by the appellant are not correct and complete. ... From the above, it is clear that Tribunal on reappraisal of the orders of the assessing officer and that of the first appellate authority has endorsed the finding of the assessing officer with regard to rejection of accounts. So far as relief granted is concerned, Tribunal re-confirmed what the first appellate authority did. Therefore it cannot be said that the Tribunal has not considered the grounds or decided the issues raised. The fact that Tribunal has not given independent reasons for confirming the impugned orders of the lower authorities does not mean that it has not considered the issues raised in the appeal. In this case, the question that was raised in the appeal was whether the assessing 3 officer in the absence of inspection and finding on any suppression was justified in rejecting the turnover on food for the reason that the turnover was very low when compared to the liquor turnover and again when compared to previous year's turnover. The assessing officer noticed that under compounding scheme bar hotels were given facility to remit tax at compounded rate on food at 15% of the turnover of liquor sales. Therefore, according to him, the turnover of food sold should be around 15% of the liquor sales. Therefore he rejected the accounts on food sales and estimated the turnover on food at 12.5% of the liquor sales, which was reduced by the first appellate authority to 10%. The question that arose before the first appellate authority and the Tribunal was whether enormously low turnover on food when compared to turnover of liquor is a justification for rejection of accounts on foods sales. It is common knowledge that customers go to bar hotel not only for drinking liquor but to avail the facility for food as well. Therefore there is nothing wrong in expecting a reasonable turnover on food sales and in order to estimate the turnover realistically, there is nothing wrong in the officer considering the sales turnover returned on liquor sales. In fact compounding scheme is introduced later which provides for payment of tax on food sales at 4 15% of the liquor sales which is based on statistics collected from the market. Applying this principle, the rejection of the turnover on food declared by the assessee at much below 15% of turnover of liquor sale is justified. In any case, when Tribunal accepted the finding of the assessing officer in the first round, there is no justification for another bench of the Tribunal to reconsider the findings and come to a different conclusion for the reason that accounts cannot be rejected without actual detection of suppression. We therefore vacate the order of the Tribunal in rectification proceedings as the order passed in such proceedings is not on rectification of mistakes but a review of the earlier order by a different bench which is not permissible under Section 43 of the Act. If respondent has any grievance against the original order they are free to challenge the same in revision and our observations hereinabove made will not stand in their way of challenging the said order. ST. Revision is allowed as above. (C.N.RAMACHANDRAN NAIR) Judge. kk (C. K. ABDUL REHIM) Judge. 5