IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN FRIDAY, THE 13TH MARCH 2009 / 22ND PHALGUNA 1930 ST.Rev..No. 52 of 2008() ------------------------ TA.564/2006 of S.T.A.T., ADDL.BENCH-II, ERNAKULAM .................... PETITIONER/APPELLANT ---------------------------------------- K.JOY, PROPRIETOR, EASY FLAMES KOLENCHERRY P.O., ERNAKULAM DISTRICT. BY ADV. SRI.V.P.SUKUMAR SRI.JAIRAM.V.MENON RESPONDENT(S): --------------- STATE OF KERALA REPRESENTED BY THE CHIEF SECRETARY, SECRETAIRAT THIRUVANANTHAPURAM. BY GOVERNMENT PLEADER SRI. V.K. SHAMSUDEEN THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 13/03/2009, ALONG WITH STRV NO. 53 OF 2008 , THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & K.SURENDRA MOHAN, JJ. .................................................................... S.T. Revn. Nos.52 and 53 of 2008 .................................................................... Dated this the 13th day of March, 2009. ORDER Ramachandran Nair, J. The question raised in the connected revisions is whether the Tribunal was justified in sustaining the addition on first sale of LPG. Petitioner, an authorised dealer in LPG, was supplied gas by the Oil Company namely, BPCL from Coimbatore. Even though sales turnover of the goods brought from outside is first sales taxable under the KGST Act, petitioner suppressed the turnover which led to levy of penalty. Consequent upon detection of suppression, petitioner filed revised returns for 1999-2000 and 2000-2001 and remitted the tax along with interest. According to the petitioner, even though revised returns were filed declaring the entire suppressed turnover, still addition was made. Additions are modified and partly confirmed in first appeal. On second appeal, Tribunal confirmed the first appellate order for 1999-2000 but granted slight reduction in the addition for the next year. It is against these orders of the Tribunal the petitioner has 2 filed these revision. We have heard counsel for the petitioner and Government Pleader appearing for the respondent. 2. On going through the Tribunal's order we find that the Tribunal has rejected the claim for the reason that in the case of bar hotels and in respect of liquor sales, this court took the view that when accounts are rejected as unreliable, addition is called for, no matter the department does not establish the source of liquor purchased. However, in this case counsel for the petitioner rightly pointed out that petitioner is an authorised dealer of LPG and during these years, the item is supplied only by Public Sector Oil Companies. Besides this, an authorised dealer is not allowed to deal in the same product supplied by another manufacturer or dealer. There is no case against petitioner for violation of licence conditions for marketing LPG. It is on record that the details of all interstate supplies have been collected by the department from BPCL which is a Public Sector Company. When full details of supplies from outside State are furnished by the BPCL, there is no scope for assuming that petitioner has brought goods more than what is covered by the certificate issued by BPCL. We, therefore, feel that the addition over and above the actual quantity can be only 3 relating to the permitted margin or over gross profit and no further addition is called for. However, by virtue of operation of Section 23 (3A) of the KGST Act, petitioner is liable to pay interest for the period from filing of monthly returns as interest is payable on the difference between assessed tax and tax paid based on returns. Subject to payment of interest under Section 23(3A) for the entire period, we allow the revision cases by reversing the order of the Tribunal and that of the first appellate authority, but with direction to the Assessing Officer to modify the assessment on actual suppressed turnover plus permitted margin for local sales. Whatever is the interest paid will be credited and balance only will be demanded from the petitioner. C.N.RAMACHANDRAN NAIR Judge K.SURENDRA MOHAN Judge pms