IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN MONDAY, THE 24TH MAY 2010 / 3RD JYAISHTA 1932 ST.Rev..No. 95 of 2010() ------------------------ TA.153/2009 of STAT ADDL.BENCH, KOTTAYAM .................... PETITIONER/APPELLANT ---------------------------------------- M/S.HOTEL BREEZELAND LTD., BYE-PASS JUNCTION,M.C.ROAD,VAZHAPPALLY.PO, CHANGANASSERY,REPRESENTED BY ITS DIRECTOR, DOMINIC SAVIO JOSEPH. BY ADV. SRI.V.P.SUKUMAR SRI.KURYAN THOMAS RESPONDENT(S): RESPONDENT ------------------------- STATE OF KERALA REPRESENTED BY THE CHIEF SECRETARY,SECRETARIAT,THIRUVANANTHAPURAM. PUBLIC PROSECUTOR SRI.MOHAMMED RAFEEQ THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 24/05/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ ----------------------------------------------------------- S.T.Rev. No.95 OF 2010 ------------------------------- Dated this the 24th day of May 2010 J U D G M E N T Ramachandran Nair,J Two questions are raised in the revision filed by the assessee - petitioner. Assessee is a retail dealer in Foreign Liquor in the bar hotel. During inspection, it was noticed that rate of margin charged for sale of the very same item is not uniform. Therefore, average gross profit from 13 bills recovered during inspection was adopted for the purpose of assessment. Counsel for the petitioner tried to justify before us the different rate of margins charged on same item by stating that some customers are enjoying facility in the A/C room and some are sitting in non A/C portion of the bar hotel. However, G.P contended that as against 94% average Gross Profit adopted by the officer based on recovered bills, the first Appellate Authority reduced it to 75%. Tribunal has confirmed it against which this revision is filed. 2. So far as percentage of Gross Profit adopted is concerned, we feel in principle the assessment is tenable because average of actual found from the recovered bills only is taken. So far as relief granted is concerned, we find reduction granted is substantial and reasonable because dealer cannot say that more S.T.Rev. No.95 OF 2010 2 than 25% of Gross Profit is attributable to A/C facility. So much so, we find no merit in the challenge against estimated addition of Gross Profit at 75%. 3. The second question raised pertains to addition to the turn over sustained by the tribunal at Rs.5,00,000/- (Rupees five lakhs only). We find force in the contention of the learned counsel for the petitioner that the entire purchase was from Beverages Corporation, a Kerala Government Company, and the officer has no case that the petitioner has made unaccounted purchases. He therefore rightly contended that charging different rates of margin found during inspection does not justify presumption of unaccounted purchase in the absence of any material and without cross verification with the Beverages Corporation which the officer could have done. We do not find any justification for assuming unaccounted purchase and sales. 4. Therefore we allow the revision in part by cancelling the addition of Rs.5,00,000/- (Rupees five lakh only) sustained by the tribunal but by sustaining Gross Profit addition. Sd/- C.N.RAMACHANDRAN NAIR (JUDGE) Sd/- P.S.GOPINATHAN (JUDGE) vdv //TRUE COPY// P.A TO JUDGE