IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT :- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER MONDAY, THE 24TH NOVEMBER 2008 / 3RD AGRAHAYANA 1930 ST.Rev.No.335 of 2008 -------------------------------------- (AGAINST THE COMPOSITE ORDER DATED 19/08/2008 IN T.A.Nos. 96, 97,98 & 99 of 2008 OF THE KERALA SALES TAX APPELLATE TRIBUNAL, THIRUVANANTHAPURAM (ASSESSMENT YEAR 2004-2005) .................... REVISION PETITIONER/APPELLANT/ASSESEE:- -------------------------------------------------------------------- RAHMATH BEEGAM VALIYATH INDUSTRIES, KUNDARA. BY ADV. SRI.S.SOMAN SMT.P.RAJATHA RESPONDENT/RESPONDENT/REVENUE:- ---------------------------------------------------------- STATE OF KERALA, REP.BY ITS CHIEF SECRETARY TO GOVERNMENT OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM. BY SENIOR GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ. THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 24/11/2008, ALONG WITH STRV.Nos.336/2008, 337/2008 & 338/2008 THE COURT ON THE SAME DAY PASSED THE FOLLOWING: H.L.DATTU, C.J. & A.K.BASHEER, J. ------------------------------------------------------ S.T.Rev.Nos.335, 336, 337, & 338 of 2008 --------------------------------------------- Dated, this the 24th day of November, 2008 O R D E R H.L.Dattu, C.J. The common order passed by the Kerala Sales Tax Appellate Tribunal, Thiruvananthapuram in T.A.Nos.96, 97, 98 & 99 of 2008 dated 19th August, 2008 is the subject matter of these revision petitions. 2. Since the assessee is common and the legal issues involved are also identical, these revision petitions are clubbed, heard and disposed of by this common order. 3. The assessee is a dealer registered under the provisions of the Kerala General Sales Tax Act (“KGST Act” for short). The assessee is the Proprietrix of a stone crushing unit. 4. The assessment years in question are for the periods 2001-2002 to 2004-2005. For these assessment years the assessee has filed her annual returns before the assessing authority, and, in that has conceded a particular total and taxable turnover for the purpose of S.T.Rev.No.335,336,337,338/2008 -2- assessment under the provisions of the K.G.S.T. Act. The assessing authority, after verification of the books of accounts has rejected the books of accounts and also the returns filed by the assessee, and, thereafter, has issued a pre-assessment notice to the assessee. In the said notice, the assessing authority had made it clear that, he has collected necessary information with regard to consumption of electricity by the assessee's unit from K.S.E.B. After receipt of the reply filed, the assessing authority in his detailed order has confirmed the proposal made by him. The assessing authority has found that accounts produced has no nexus to the electricity consumed and going by the accounts, the assessing authority noticed that it is difficult to believe that 95 units of electricity is consumed to crush one lorry load of rubbles, and the assessing authority has adopted 25 units of current consumption for production one lorry load of metal chips and has allowed 30% of total current consumption towards transmission loss, trial running, repairs etc. 5. The first appellate authority noticed that main reason for adoption of current consumption for estimating the turnover is the failure to maintain production account and further no quantitative statement regarding production was also furnished. The first appellate authority found the estimation on the basis of consumption of electricity S.T.Rev.No.335,336,337,338/2008 -3- as reasonable and dismissed the appeal. 7. The Tribunal also noticed that the assessing authority has categorically held that consumption of electricity ascertained in this case is used solely for the production of metal chips and evidently no request is made by the appellant to conduct a test for determination of actual unit required per lorry load of crushed stones. It was also noticed that going by the conceded rate, it is difficult to believe that 95 units of electricity is consumed to crush one lorry load of rubbles and the appellant has no case that 95 units of electricity is required for production of one lorry load of crushed metal. It was also noticed that the assessing authority has considered the contention of the appellant that consumption of current depends on various factors and accordingly 30% was deducted on that account. The Tribunal also found no illegality in the method adopted by the assessing authority and concurred with the finding of the assessing authority that 25 units of electricity is required to crush one lorry load of rubbles. The estimation of turnover was thus upheld. That is how the assessee is before us in these sales tax revision cases. 6. The assessee has framed the following questions of law for our consideration and decision. They are as under: S.T.Rev.No.335,336,337,338/2008 -4- “A. In the absence of any irregularity in the books of accounts maintained in the ordinary course of business of transactions of the assessee is it justified in law to reject the books of accounts and estimate the turnover on electricity consumption. B. Is it not the burden of proof on the department to conduct test crushing before rejecting the true and correct books of accounts maintained in the ordinary course of business transaction by the assessee and invoke estimation of turnover based on current consumption, since there was not any sort of discrepancy in the books of accounts or in business transactions and there was no suppression or omission either in purchase or sales detected by inspection of business place nor any sorts of allegations made. C. Having found by the assessing authority that the current consumption was used for multipurposes such as for the use of conveyor belts for brining stones to the crusher and from crusher to vibrator and for repairing purposes and various other purposes, is it fair, proper and justified on the part of the tribunal to adopt and uphold that consumption of electricity ascertained has been solely used for production of crushed stones?” S.T.Rev.No.335,336,337,338/2008 -5- 7. The questions of law framed by the assessee, in our opinion, by no stretch of imagination can be construed as questions of law. Even otherwise also, the assessing authority, relying on the enquiry that he has made with the Kerala State Electricity Board authorities and also the similar business by different stone crushing units has come to the conclusion that the claim made by the assessee is on the higher side. In that view of the matter all the authorities under the Act have concurrently found that the assessing authority was justified in rejecting the books of accounts and completing the assessment by way of best judgment assessment. 8. In the normal course this Court will not interfere with the best judgment assessment in a petition filed under Section 41 of the K.G.S.T. Act unless the findings on facts by the authorities is either arbitrary or wholly based on mere assumptions and presumptions. In the instant case, the assessing authority has assigned not only appropriate but also cogent reasons for rejecting the books of accounts and going for best judgment. 9. Therefore, in our opinion, the Tribunal has not committed any error which would call for our interference in exercise of the powers under Section 41 of the KGST Act. Consequently, while S.T.Rev.No.335,336,337,338/2008 -6- affirming the orders passed by the Tribunal, we reject these tax revision petitions. 10. In view of the order passed in the Sales Tax Revision Petitions, all pending interlocutory applications are closed. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER) JUDGE MS/dk.