IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN TUESDAY, THE 17TH FEBRUARY 2009 / 28TH MAGHA 1930 ST.Rev..No. 68 of 2008() ------------------------ AGAINST THE ORDER DATED 30/08/2007 IN TA.76/2007 of S.T.A.TRIBUNAL,ADDL.BENCH,PALAKKAD .................... REVISION PETITIONER/RESPONDENT/REVENUE: ----------------------------------------------------------- STATE OF KERALA, REP. BY JOINT COMMISSIONER (LAW) IN-CHARGE, COMMERCIAL TAXES, ERNAKULAM. BY GOVERNMENT PLEADER SRI. VINOD CHANDRAN RESPONDENT(S): APPELLANT/ASSESSEE: ---------------------------------- M/S. KARAMPURAM RUBBERS, CHELARI. ADV. SRI.V.V.ASOKAN FOR R1 SMT.S.AMINA FOR R1 THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 17/02/2009, ALONG WITH STRV NO. 82 OF 2008 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & K. SURENDRA MOHAN, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - S.T.Rev. Nos. 68 & 82 OF 2008 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 17th day of February, 2009 JUDGMENT Ramachandran Nair,J. The challenge in the two revisions filed by the State is against cancellation of assessment of closing stock by the Tribunal. We have heard Special Government Pleader appearing for the petitioner, and counsel appearing for the respondent. After hearing both sides and on going through the orders we do not find any justification for the Tribunal to cancel assessment of closing stock without any evidence about the availability of physical stock in terms of the figures shown in the stock register. It is stated that during inspection on 31.7.2006, the closing stock according to the books was Rs. 14.5 lakhs. If there was inspection, obviously physical stock would have been verified and later on comparing physical stock with book figures the department would have easily found out whether book entries of the stock were bogus. Assessee was found to be showing huge closing stock on regular basis from 1997 onwards. Considering the nature of business, which is purchase and sale of rubber, a perishable commodity, retention of closing stock every year is difficult to be believed. However, nothing bars the assessee from acquiring STRV : 68 & 82/08 -:2:- massive stock in the fag end of the year so that there is closing stock and selling the same when the price increases later. However, maintenance of huge closing stock every year is a matter which requires critical examination. The Tribunal cancelled the assessment of closing stock probably on the assumption that physical stock was available in terms of the book entries. However, we notice that Tribunal has not even cared to get the records and verify shop inspection report, which would have revealed the availability of stock in terms of the claim of the assessee. 2. We therefore set aside the orders of the authorities below on assessment of closing stock with direction to the assessing officer to verify the records including shop inspection reports available for the relevant years and then consider the matter afresh and pass orders after issuing notice and after giving an opportunity to the assessee to file objections and for hearing. S.T. Revisions are allowed as above. (C.N.RAMACHANDRAN NAIR) Judge. (K. SURENDRA MOHAN) kk Judge. STRV : 68 & 82/08 -:3:- STRV : 68 & 82/08 -:4:-