Madras High Court
The State Of Tamil Nadu vs Tvl.Sayar Jewellery on 23 December, 2011
Bench: P.Jyothimani, S.Vimala
IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 23.12.2011 Coram The Honourable Mr.Justice P.JYOTHIMANI and The Honourable Mrs.Justice S.VIMALA Tax Case Revision No.1885 of 2006 The State of Tamil Nadu, rep.by the Joint Commissioner(CT), Madras, Enforcement, Madras-6 .. Petitioner vs. Tvl.Sayar Jewellery, 656, Anna Salai, Madras-6. .. Respondent The above tax case revision is preferred against the order dated 8.3.1991 passed by the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Chennai, in Ta.No.482/90 and TMP.No.483/90. For Petitioner : Mr.R.Sivaraman,Spl.G.P.(Tax) ORDER
(Order of the Court was made by P.JYOTHIMANI,J.) The Revenue has preferred this tax case revision as against the order dated 8.3.1991 passed by the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Chennai, in T.A.No.482 of 1990 in TMP.No.483/90, by which the Tribunal has dismissed the enhancement petition filed by the Revenue. The assessment year involved is 1987-88.
3. This revision was admitted by this Court on the following substantial questions of law:
1. Whether on the facts and circumstances of the case, the Tribunal has erred in not considering that an assessee cannot approbate or reprobate a sworn statement as held in the decision in the case of Yousuff Radio v. The Board of Revenue (CT), 43 ST 525?
2.Whether the order of the Tribunal is perverse in having relied upon the entry in the ledger without verification of the corresponding entry in the basic record, namely, Day Book?
3.Whether the Tribunal has erred in having dismissed the Enhancement Petition filed by the State in a preemptive manner without application of mind?"
4. Despite the Respondent having been served and its name is also found printed in the cause list, there is no representation on behalf of the respondent. Hence, we proceed to dispose of the matter on merits.
5. The assessee is a jewellery merchant at Madras. In respect of the assessment year 1987-88 the Enforcement Wing of the Central Excise Department has made certain inspections, in which certain defects were noticed. It appears, before the Enforcement Wing, the assessee has produced certain documents. It was based on the said inspection by the Enforcement Wing, the authorities under the TNGST Act revised the assessment on the basis that there has been a deficiency of 2,017.250 grams of gold. The assessing authority has arrived at an estimation of suppression on stock variation at Rs.6,13,244/- and also has added five times on the actual suppression towards omissions and also imposed penalty under Section 16(2) of the TNGST Act. It was as against the said order of the assessing authority, the assessee filed appeal before the Appellate Assistant Commissioner(CT), who has found that the deficiency was not to the extent of 2017.250 grams, but only 19.750 grams, but however, sustained the suppression at Rs.6,13,244/-, while deleting the five times equal addition. It was as against the reduction of the deficit in stock, the Revenue has filed appeal for enhancement before the Tribunal, while, the assessee filed appeal in respect of the portion of the Appellate Assistant Commissioner's order in sustaining the suppression at Rs.6,13,244/-. When both the appeals were taken together, the Tribunal, while accepting the finding of the Appellate Assistant Commissioner that the deficit was only to the extent of 19.750 grams, based on a certificate produced before the Tribunal from Bombay Mint dated 29.3.1988, has fixed the approximate stock deficit at Rs.6000/- and added another Rs.3000/- being the 50% of actual stock discrepancy, and thereby, sustained the turnover to the extent of Rs.9000/-.
6. In so far as it relates to the substantial question of law (1) is concerned, it is the contention of the Revenue that the assessee having given a statement before the Central Excise Department cannot be expected to give a different statement before the authorities under the TNGST Act, and therefore, the conduct of the assessee would amount to approbate and reprobate, by relying on the decision in Yousuff Radio v. The Board of Revenue (CT) - 43 STC 525.
7. We are not able to accept the said contention. There is no provision under the TNGST Act to enable the authority under the Act to adopt any other procedure followed by the Central Excise Department. In the absence of any enquiry conducted by the authority under the TNGST, in our view, the Revenue has not done its duty in a proper manner. Therefore, the question of approbation and reprobation does not arise. Accordingly, substantial question of law (1) is answered in favour of the assessee and as against the Revenue.
8. In as far as the substantial question of No.(2) is concerned, on the face of it, it relates to a factual issue, which does not require any interference and accordingly, the said question of law also is answered against the Revenue.
9. Substantial Question of law No.(3) is concerned, it is an actual issue raised by the Revenue in respect of enhancement. On a reference to the Tribunal's order it is clear that the Tribunal has confirmed the actual finding of stock discrepancy at 19.750 grams and not 2017.250 grams, based on a certificate produced before the it from Bombay Mint dated 29.3.1988. The relevant portion of the impugned order of the Tribunal is extracted hereunder:
"6. . . . The appellant has produced the certificates from Bombay Mint dated 29.3.88 stating that Gold weighing 1997.599 kg were produced fro purification. This is an evidence from a Government source which is difficult to fabricate. This evidence has not been rebutted by the Revenue at any stage. We are of the view that the Appellate Assistant Commissioner's decision that but of the alleged stock discrepancy of 2017.250 grams the stock deficit tha was not satisfactorily explained at the time of inspection was only to the tune of 19.750 grams was correct. But however, the Appellate Assistant Commissioner after making such as observation in para 5 had reverted in para 6 and confirmed the actual suppression of Rs.6,13,244.00 wrongly. The Appellate Assistant Commissioner should have stood to his guns and sustained only the stock discrepancy to the extent of 19.750 grams of gold jewellery only.. . . . . "
10. The Tribunal, by applying the principle of proportionality, has fixed the stock deficit at Rs.6,000/-, approximately, and by adding another 50% of Rs.3000/-, has arrived the turnover at Rs.9000/-, which cannot be said to be either irrational or against the principle of law. We are of the view that the Tribunal has in fact followed the proportionality theory, which cannot be found fault with. Accordingly, the substantial question of law (3) also is answered against the Revenue.
11. In so far as it relates to five times equal addition is concerned, the Tribunal has correctly rejected the case of the Revenue, which also does not require any interference.
12. In the result, the tax case revision is dismissed. However, there is no order as to costs.
msk To The Tamil Nadu Sales Tax Appellate Tribunal, (Main Bench), Chennai