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 TUESDAY, THE 26TH AUGUST 2008 / 4TH BHADRA 1930 S.T.Rev.No.181 of 2008 ----------------------------------------- T.A.NO.475/2006 OF THE KERALA SALES TAX APPELLATE TRIBUNAL ADDITIONAL BENCH-II, ERNAKULAM (ORDER DATED 20.7.2007 - ASSESSMENT YEAR 2002-03) .................... REVISION PETITIONER/APPELLANT/ASSESSEE:- --------------------------------------------------------------------- SREEDHARA PODUVAL, PODUVAL ENTERPRISES, NORTH PARUR. BY ADV. DR.K.B.MUHAMED KUTTY (SR.) SRI.FIROZ.K.M. RESPONDENT/RESPONDENT/REVENUE:- ----------------------------------------------------------- THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. BY SENIOR GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ. THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 26/08/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:- H.L.Dattu,C.J. & A.K.Basheer,J. ---------------------------------------------- S.T.Rev.No.181 of 2008 ---------------------------------------------- Dated, this the 26th day of August, 2008 ORDER H.L.Dattu,C.J. The assessee before us is a dealer in Diesel Generating Sets and its accessories. He has registered himself as a dealer under the provisions of the Kerala General Sales Tax Act (“Act” for short). 2. For the assessment year 2002-2003, the assessee had filed his annual returns. The assessing authority had completed the assessment proceedings under Section 17(4) of the Act, accepting the returns filed by the assessee. The exemption that was claimed and allowed by the assessing authority was on the ground that the sales effected by the assessee are second sales and supported by valid bills and other documents. 3. Immediately after completion of the assessment proceedings by the assessing authority for the assessment year in question, the assessee had filed an application before the assessing authority, stating that he has non-taxable turnover of Rs.3,84,880/- and the same was not included in the annual return filed for the assessment year in question, and accordingly had requested the assessing authority to rectify the order of assessment passed in accordance with the statutory provisions. S.T.Rev.No.181 of 2008 - 2 - 4. The assessing authority, being of the opinion that a part of the turnover of the dealer has escaped assessment to tax, has initiated re-assessment proceedings by issuing a notice under Section 19 of the Act. A reply had been filed by the assessee and in that had stated that while filing the annual return, he had omitted to mention the non-taxable turnover of Rs.3,84,880/-. The explanation so offered by the assessee is not accepted by the assessing authority and, accordingly, has completed the re-assessment proceedings under Section 19 of the Act. 5. The appeal filed against the re-assessment order was partly allowed by the first appellate authority. The assessee had carried the matter before the Tribunal in T.A.No.485 of 2006. The Tribunal, by its order dated 20th July, 2007, has granted some relief to the assessee. 6. Aggrieved by the findings and conclusions reached by the Tribunal, the assessee is before us in this revision petition. 7. The assessee has raised the following questions of law for our consideration and decision. They are as under: “(i) Whether on the facts and in the circumstances of the case, has not the Appellate Tribunal committed an error in reversing the order of the first Appellate Authority without stating any valid reason and relying on the oral statement of the State Representative, which is not raised as a ground of appeal by the State? Is not the decision of the Appellate Tribunal perverse and erroneous? S.T.Rev.No.181 of 2008 - 3 - (ii) Whether on the facts and in the circumstances the case, has not the Appellate Tribunal committed an error in not dealing with the non-taxable nature of the transactions in question while the petitioner has adduced cogent and convincing proof to that effect which has been fully endorsed by the first Appellate Authority? (iii) Whether on the facts and circumstances of the case, the Appellate Tribunal is justified in confirming assessment Under Section 19 instead of directing to rectify the assessment under section 43 of the Act? Is the Appellate Tribunal justified in confirming the stand taken by the assessing authority leading to imposition of penalty against the revision petitioner under Section 17(5A) of the Act?” 8. Dr.K.B.Mohamedkutty, learned Senior Counsel appearing for the petitioner/assessee, would submit that the Tribunal was not justified in confirming the orders passed by the first appellate authority. In support of his contention, the learned counsel would submit that it is on the request made by the assessee, instead of passing a rectification order, the assessing authority has passed the re-assessment order. 9. Though the above argument of Dr.Mohamedkutty, learned Senior Counsel appearing for the assessee, at the first blush, appears to be attractive, but on a deeper consideration of the matter, in our opinion, has no merit. We say so for the reason, that, it was the specific case of the Sales Tax Representative before the Tribunal that the rectification S.T.Rev.No.181 of 2008 - 4 - application came to be filed by the assessee only after a shop inspection had been conducted by the Intelligence Officer of the Department. 10. Here is a case where the assessee had filed its annual returns and has claimed the entire turnover as exempted from payment of sales tax. The assessing authority has accepted the version of the assessee and, thereafter, in view of the report from the Intelligence Wing of the Department, the assessing authority has thought it fit to reopen the assessment by issuing notice under Section 19 of the Act. May be coming to know that such proceedings would be initiated, the assessee had filed an application before the assessing authority for rectification of the mistake apparent on the face of the record in the order of assessment passed by the assessing authority, by bringing to the knowledge of the assessing authority that while filing the annual returns, the assessee had omitted to mention the non-taxable turnover of Rs.3,84,880/-. 11. The Tribunal, keeping in view the shop inspection report and the version of the assessee, has come to the conclusion that the assessing authority was fully justified in passing an order of re-assessment. In our opinion, this is not a case where the Tribunal has failed to decide a question of law or has erroneously decided a question of law which has come up for its consideration and decision. It is also not the case of the assessee before us that the finding of fact arrived by the S.T.Rev.No.181 of 2008 - 5 - Tribunal is a perverse finding. Therefore, we decline to entertain this revision petition. Accordingly, while rejecting the revision petition, we answer the questions of law raised by the assessee in the negative and against the assessee and in favour of the Revenue. Ordered accordingly. H.L.Dattu Chief Justice A.K.Basheer vku/dk Judge