IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE K.M.JOSEPH MONDAY, THE 3RD MARCH 2008 / 13TH PHALGUNA 1929 S.T.Rev.No.427 of 2006 --------------------------------------------------- T.A.NO.34/2006 OF THE KERALA SALES TAX APPELLATE TRIBUNAL, THIRUVANANTHAPURAM. (ORDER DATED 31.05.2006) (ASSESSMENT YEAR 2000-2001) .................... REVISION PETITIONER:- ---------------------------------- M/S.A.K.CASHEW FACTORY, CHAVARA, KOLLAM DISTRICT, REPRESENTED BY K.ABOOBACKER KUNJI, MANAGING PARTNER. BY ADV. SRI.ARIKKAT VIJAYAN MENON SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SRI.MAHESH V.MENON RESPONDENT:- ----------------------- STATE OF KERALA. BY SPECIAL GOVERNMENT PLEADER SRI.VINOD CHANDRAN. THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 03/03/2008, ALONG WITH S.T.REV.NO.430 OF 2006, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: H.L.Dattu, C.J. & K.M.Joseph, J. ----------------------------------------------------------------- S.T.Rev.Nos.427 of 2006 & 430 of 2006 ----------------------------------------------------------------- Dated, this the 3rd day of March, 2008 ORDER K.M.Joseph,J. The assessee is the petitioner in both these revision petitions. The revision petitions relate to the year 2000-01 under the Kerala General Sales Tax Act (“Act” for short). 2. The petitioner is a cashew processor. The assessment was finalised by order dated 15.11.2003. Thereafter, acting under Section 19 of the Act, the assessment was reopened and as per Annexure-A dated 31.12.2004, the assessing authority has proceeded to reckon the turnover in a sum of Rs.1,23,33,333/-. On verification of the purchases of kernel by certain dealers of the petitioner, it was found by the Intelligence Officer (IB), Commercial Taxes that certain bills of the petitioner were not accounted. These bills were in respect of cashew sold by the petitioner to another assessee, viz. M/s.Urban Stansilous, Kollam. The total amount of the bills and the tax collected as per those bills are as under: “Bill No./date Amount Tax collected as per bill 1. 7/18.10.00 Rs. 27,405.00 2,030.00 2. 48/11.12.00 Rs.1,17,288.00 8,688.00 3. 8/12/1/01 Rs. 22,302.00 1,652.00 4. 9/27.1.01 Rs. 65,475.00 4,850.00 5. 12/12.2.01 Rs.1,01,115.00 7,490.00 6. 50/2.3.01 Rs.1,06.688.00 7,903.00 -------------------- ------------- Total Rs.4,40, 273.00 32,613.00 ============ =======” Thus, the total unaccounted sales was of Rs.4,40,273/-. The assessing authority reasoned that the petitioner had maintained two sets of bills S.T.Rev.No.427 & 430 of 2006 - 2 - comprising of 50 bills each in addition to that produced before the assessing authority at the time of scrutiny of accounts earlier. On the basis of the average value of the sale bills which have been suppressed, he found that the amount per bill is Rs.73,400/-. Noting that there were a total number of 100 bills in two sets of bills of 50 each, he found that the petitioner had evaded tax in respect of sales turnover in a sum of Rs.73,40,000/- (73,400 x 100). He also estimated the cost of the rawnut required for the production at Rs.48,93,333/- (two-third of the sales of kernel). 3. Feeling aggrieved by the assessment so made, the petitioner preferred an appeal before the first appellate authority. The appellate authority proceeded to partially allow the appeal and proceed to grant some relief to the petitioner by directing that an addition of equal amount on the conceded purchase turnover of rawnuts and corresponding estimation of the sales turnover at 150% of cashewnuts added is just and reasonable in the present case to cover up the probable omission and suppression and, thus, directed the assessing authority to modify the escaped assessment. Further, the first appellate authority also found that treating the purchase made of rawnut as a local purchase, tax has to be levied only at 4% instead of 8%. 4. Aggrieved by the orders so passed by the first appellate authority, the petitioner has carried the matter in appeals and Cross Objection before the Tribunal. The State also preferred appeal. The Tribunal restored the order of the assessing authority. 5. It is feeling aggrieved by the order passed on the appeal filed by the assessee as also the order passed on the appeal filed by the Revenue that these revision petitions have been filed. S.T.Rev.No.427 & 430 of 2006 - 3 - 6. We heard Sri.Harisankar V.Menon, learned counsel appearing for the revision petitioner and Sri.Vinod Chandran, learned Special Government Pleader. 7. Sri.Harisankar V.Menon, learned counsel appearing for the revision petitioner points out that the view taken by the first appellate authority is a justifiable view and there was no warrant for the Tribunal to interfere with the reasoning and finding of the first appellate authority. He would also point out that it may be true that the assessee had compounded the offence by way of paying Rs.35,222/- as compounding fee, but that would not justify the assessing authority in arriving at the suppressed turnover by taking the average of the bills which were found to have been suppressed. He would further contend that the Tribunal should have found that the view taken by the first appellate authority was an imminently possible view and interest of justice has been served by the passing of the order by the first appellate authority and it is not as if the first appellate authority has completely exonerated the petitioner from payment of any further amount as it has added sales turnover in a sum equivalent to the purchase of the kernel and, therefore, the interest of both parties are sub-served. He also relied upon the decision reported in State of Kerala v. C.Velukutty [(1966) 17 STC 465]. 8. Sri.Vinod Chandran, learned Special Government Pleader justified the orders passed by the Tribunal and pointed out that there was no scope for interference in a revision under Section 41 of the Act. 9. It is found by the assessing authority, the first appellate authority and the Tribunal that the petitioner-assessee was maintaining two sets of sale bills. The first appellate authority confirms the reasoning of the assessing authority that the assessee was maintaining a parallel set of bill books for effecting unaccounted S.T.Rev.No.427 & 430 of 2006 - 4 - sales of kernels. The reasoning given by the first appellate authority for interfering with the methodology adopted by the assessing authority is that the assessing authority has failed to establish that complete parallel set of sale bills were used for the unaccounted sales of high quality kernels only. He further reasons that there is no materials on record to prove that the assessee had used the entire sale bills for the unaccounted sales of grade kernels and not used for the sales of rejection kernels or any other goods. It is also found that there is no finding by the assessing authority that in addition to the sales to Urban Stancilous there were similar sales to other dealers also. The Tribunal, on the other hand, finds that if the sales suppression which has been found were limited to the amounts indicated in the six bills which were detected from the buyer of the petitioner who has sold the cashew, it was for the petitioner-assessee to produce those bills and establish that there was no suppression beyond the suppression detected in those six bills. It is to be noted that it is a view taken by the Tribunal in a statutory appeal filed before it by the Revenue. It is not as if it is a view taken by the authority in exercise of its powers under Section 37 of the Act. It cannot be contended for the petitioner that it is not open to the Tribunal to take a view, which commends itself to it as the more correct view. This is as a jurisdiction exercised by the Tribunal as Appellate Tribunal and not a revisional jurisdiction. 10. We further notice that this is a case where it cannot be disputed, going by the six bills which were detected, that the petitioner had collected tax from the buyer and did not remit sales tax. Further, it is to be noted that going by the details of the bills which were detected, the view taken by the assessing authority is certainly a possible view. It cannot be characterised as capricious or unreasonable. In such circumstances, we find that there is no merit in the revision filed by the S.T.Rev.No.427 & 430 of 2006 - 5 - assessee against the order of the Tribunal in the appeal filed by the Revenue. Needless to say, the revision filed by the petitioner against the order passed on his own appeal is found to be without merit. Accordingly, we answer the questions of law raised by the petitioner-assessee against the petitioner and dismiss the revision petitions. All pending interlocutory applications shall also stand closed. H.L.Dattu Chief Justice K.M.Joseph vku/- Judge