IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN WEDNESDAY, THE 15TH SEPTEMBER 2010 / 24TH BHADRA 1932 ST.Rev..No. 275 of 2009() ------------------------- TA.250/2008 of S.T.A.T.ADDL.BENCH,ERNAKULAM .................... REVISION PETITIONER/APPELLANT ---------------------------------------------------------- M/S.POLAKULATH TOURIST HOME, VYTTILA, PROPRIETOR THE LATE P.K.NARAYANAN, REPRESENTED BY ONE OF THE LEGAL HEIR P.N.KRISHNA LAL. BY ADV. SRI.ANIL D. NAIR SMT.NIVEDITA A.KAMATH RESPONDENT/RESPONDENT --------------------------------- STATE OF KERALA, REPRESENTED BY ITS FINANCIAL SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM. BY SR. S.P. SRI.MOHAMMED RAFIQ THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 15/09/2010, ALONG WITH STRV NO.276 OF 2009 & STRV NO.277 OF 2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & K.SURENDRA MOHAN, JJ. .................................................................... S.T. Rev. Nos.275, 276 & 277 of 2009 .................................................................... Dated this the 15th day of September, 2010. JUDGMENT Ramachandran Nair, J. In the connected revision cases filed for the assessment years 2002-2003 to 2004-2005 the question raised is whether the Tribunal was justified in sustaining the addition to food turnover in the two Bar hotels run by the petitioner during the relevant years, one at Kodungalloor and the other at Vyttila. We have heard counsel appearing for the petitioner and Government Pleader for the respondents. 2. The petitioner was engaged in running two Bar hotels, one at Kodungalloor and the other at Vyttila. On verifying the books of accounts and the returns filed, the Assessing Officer noticed that turnover of cooked food sold in Bar hotels when compared to the turnover of liquor sales was very low. The Assessing Officer felt that in order to prove the accounts to be genuine and realistic, there should be turnover of sale of cooked food commensurate with sales turnover S.T.Rev. 275/2010 & conn. 2 of liquor. The Assessing Officer, therefore, rejected the books of accounts. He has also noticed that the sales turnover of liquor conceded is also not correct. He, therefore, estimated purchase turnover of cooking materials like grocery, meat etc., and estimated the purchase turnover for assessment under Section 5A and sales turnover of cooked food under Section 5(1). Similarly some addition is also made on account of irregularities in the accounts in the liquor turnover for the purpose of turnover tax. 3. After hearing both sides and after going through the orders we find that atleast one year assessee conceded that accounts were not maintained properly and in fact the offence was compounded by remitting compounding fee. So far as the other two years are concerned, even though there is no compounding, the Assessing Officer has stated reasons as to how the accounts are unreliable. In our view, genuineness of the accounts could be checked with ground realities in business and if a Bar hotel does not return sales turnover of cooked food commensurate with liquor sales turnover, the same itself will be ground to doubt the genuineness of the accounts. In any case S.T.Rev. 275/2010 & conn. 3 we do not find any substantial question of law arising from the order of the Tribunal sustaining partly the addition made in assessment with regard to purchase turnover of materials for cooking food and sales turnover of cooked food. So far as the addition of liquor turnover is concerned, we find that addition is only for the purpose of turnover tax and no such addition is assessed as first sales turnover. We do not find any merit in the revision cases and therefore, all revision cases are dismissed. C.N.RAMACHANDRAN NAIR Judge K.SURENDRA MOHAN Judge pms