Madras High Court
The State Of Tamil Nadu vs Tvl.A.V.M.Engineering Works on 28 March, 2018
Author: S.Manikumar
Bench: S.Manikumar, M.Govindaraj
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 28.03.2018 CORAM: THE HONOURABLE MR.JUSTICE S.MANIKUMAR and THE HONOURABLE MR.JUSTICE M.GOVINDARAJ T.C.(R) Nos.74 & 75 of 2018 The State of Tamil Nadu, Rep. by the Deputy Commissioner (CT), Salem Division, Salem. .. Petitioner in both cases Vs. Tvl.A.V.M.Engineering Works, 40/2A, Palani Andaver Thottam, Seetharamapalayam, Tiruchengode. .. Respondent in both cases Prayer: Petitions filed under Section 38 of the TNGST Act, 1959, to revise the order of the Tamil Nadu Sales Tax Appellate Tribunal (AB), Coimbatore dated 30.05.2003, in Coimbatore Tribunal Appeal Nos.54 and 55 of 2002 respectively. For Petitioner : Mr.V.Hari Babu Additional Government Pleader (Taxes) - - - - - C O M M O N O R D E R
(Order of the Court was made by S.MANIKUMAR, J.) Instant Tax Cases (Revision) are filed against the common order of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Coimbatore, dated 30.05.2003, made in Coimbatore Tribunal Appeal Nos.54 (Assessment Year 1995-96) and 55 of 2002 (Assessment Year 1998-99) respectively.
2. As instant Tax Case Revisions have been preferred on the same set of facts, they are taken up together and disposed of by means of this common order.
3. Short facts leading to filing of the Revisions are that the dealer herein is a manufacturer of powerloom spares. The place of business of the dealer was inspected by the Officers of Enforcement Wing on 04.09.1998 and some incriminating records (one note book and certain slips) relating to the business were recovered. The Assessing Authority, based on the incriminating entries found in those records, determined the total and taxable turnover of the dealer by making Equal Addition for such probable omission.
4. Aggrieved over the assessment made by the Assessing Authority, the dealer, preferred appeals, before the Appellate Assistant Commissioner (CT), Erode. The Appellate Assistant Commissioner vide order dated 18.12.2000, deleted the Equal Addition made by the Assessing Authority and remanded the matter back to the Assessing Authority with a direction to add only 5% to the actual sales turnover for actual suppression.
5. Against the orders of the Appellate Assistant Commissioner (CT), Erode, the dealer filed appeals before the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Coimbatore.
6. The Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Coimbatore, vide order dated 30.05.2003, held that there was no concrete and clinching evidence to prove that sales have been effected through the entries found in the said slip and that the first Appellate Authority has also deleted similar estimation made in respect of other entries found therein and therefore, in the absence of any other material support to the contention of the Assessing Officer, the addition and estimation of sales suppression of 16 looms and proportionate purchase suppressions of spares, as unwarranted. The dealer has also furnished such details regarding sales of power loom spares to an extent of Rs.10,650/- and therefore, as rightly claimed by the dealer, the assessment made on the proportionate purchase value of spares in respect of such sales of spares as uncalled for. The Appellate Tribunal modified the turnover and remitted the matter to the Assessing Officer for de novo disposal.
7. Seeking dismissal of the order of the Tribunal, Mr.V.Hari Babu, learned Additional Government Pleader (Taxes), submitted that:
(i) Appellate Tribunal failed to note that the suppressions were culled out from a notebook recovered during the time of inspection of its place of business. The Tribunal had concluded that the brought forward entries found in the book were financial transactions which is not correct and acceptable. The Tribunal failed to note that these entries were entries relating to continuous supplies made by the dealer to the parties which were not brought forward to their regular accounts.
(ii) Appellate Tribunal erred in observing that dealer had sold only finished goods i.e. looms and there cannot be any room for estimating the spares, is not correct. The Tribunal failed to note that the dealer is a manufacturer and that purchased spares for 100ms and assembled them, in which case, the estimation of purchase suppression is a valid one. Since some of the advance amounts received by the dealer was returned, the Tribunal had given relief for the entire receipts which is not reasonable, that too without verifying the proof for the same.
(iii) Appellate Tribunal erred in observing that in some cases, the names of certain persons against whom the requirement of looms were entered were only unfulfilled orders. Actually, this fact has to be proved by the dealer and the Tribunal had simply deleted the turnover by drawing some inferences which is not acceptable.
(iv) The Appellate Tribunal, as well as the First Appellate Authority erred in deleting the assessment made by the Assessing Authority which was made based on sound data.
8. Heard the learned Additional Government Pleader (Taxes) and perused the materials on record.
9. Let us consider as to how the Appellate Assistant Commissioner (CT), Erode has dealt with the facts and issues. For the sake of convenience, the order dated 18.12.2000, passed in the appeals filed by M/s.A.V.M.Engineering Works (Respondent herein) is extracted hereunder:
"5. I heard the arguments of both the representatives and perused the connected records. The only question to be decided in this case is whether the assessment made by the Assessing Authority based on D7 records and the equal addition made thereon is in order. Secondly, whether there is any case for levy of penalty u/s 12(3)(b) of the Act.
6. At the time of hearing the learned Authorised Representative for the appellants agreed fully to the levy of tax on the turnover arrived based on entries which clearly indicate sales of power looms. His main objection was to the equal addition made and to the assumption of the Assessing Authority on certain pure cash transactions as that of sales. Besides, the learned Authorised Representative for the appellant has questioned the way in which the suppressions were worked out in some of the transactions which finds place both in D7 slips and in the note book, though they represent a single sales. The learned Assessing Authority, according to the Authorised Representative, instead of taking cognizance of any one of the entries found either in the slips or in the note book which relate to the sale of one and the same item he has taken both the entries into consideration for the purpose of arriving suppression, which is very bad in the eyes of law. Apart from this, the appellants contended the assessment made in relation to unfructified sales also.
7. The place of business of the appellants was inspected by the Enforcement Wing Officers on 4.9.98. There were minimum stock discrepancies and the officers have also recovered three slips and a pocket note book which contained particulars pertaining to business transactions.
8. The appellants have also deposed before the Enforcement Wing in respect of the entries found in the incriminating records. On going through the statement given by the appellants, it is found that they have accepted that sales were made outside the accounts; but disputed some entries, saying that in some case, even though advance amount was received, no supply of looms were made. Further, on perusal of the entries in note book, I find that in some places the appellants have noted as "thg!;" and the Assessing Authority ignoring the term Returned (thg!;) has worked out suppression.
9. In my view, the contention of the appellants that they have maintained only one pocket note book which contains business entries for all the four years in succession is a point for worthy consideration.
10. A.P.No.142/2000(95-96) In this case, a perusal of D7 entries reveal the actual sales effected by the appellants outside the accounts and the appellants themselves have also admitted the suppression. Hence the actual suppression as per D7 records and the Turnover liable for tax u/s. 7A as shown below is ordered to be sustained.
Rs.
Actual sales suppression as per D7 records : 7,92,731-00
ADD: Turnover taxable u/s 7A as determined
by the Assessing Authority (Vide
page 6 of the order) : 8,87,208-00
-----------------
Suppression sustained : 13,79,939-00 @ 4%
-----------------
11. A.P.No.293/2000(96-97). ..............
12. A.P.No.324/2000(97-98) . ................
13. A.P.No.536/2000(98-99)
In this appeal, the appellants while admitting the suppression as found in D7 records in general, they objected to the following:-
Turnover assessed on the basis of D7 notebook and equal addition : Rs.7,05,618-00 Turnover assessed on the stock discrepancy (20,387 x 2 + 15101 x 2) : Rs. 70,976-00
-------------------
Rs.7,76,594-00
-------------------
The major dispute relate to the entries found in D7 slips. The contention of the appellants is that the many entries found in D7 slips also find place in D7 note book and the learned Authorised Representative, at the time of hearing has correlated the entries in the presence of the Departmental Representative. As rightly pointed out by the learned Authorised Representative for the purpose of assessment only one entry either as found in D7 slips or in the note book need be considered.
14. The entries from Sl.No.3,4,5,6,8,9,12 which is found in slip No.2 is similar to the entries as found at Page 31,22,37,20,53 and 44 respectively in D7 book. The appellants in the grounds of appeal as well as at the time of hearing have correlated the entries. The name and number of looms reflected in both D7 slip and D7 note book were one and the same.
15. Similarly, in respect of slip No.3 also, the appellants have established the assessment has been made on the same transactions on the different assessment years. The entries found in Sl.No.1,2,5,8 were clearly proved that they have subjected to assessment on the strength of the entries found in D7 note books. The appellants are therefore liable for deduction from the actual suppression whenever double taxation has been made. A detailed discussion regarding sales are given under:- ..............
In respect of slip No.1 out of the twelve names noted, they have supplied looms to eight persons and the corresponding details of supply and receipt of payment is noted in the pages of note book. The Assessing Officer has also assessed the contents entered in the note book in the Revised assessment orders for 96-97 and 97-98 itself. The assessment made in the assessment year in question on the basis of the entry in the slip is not justified and would mean double assessment on the same turnover.
16. In respect of Slip No.3 also they have supplied looms to persons and the corresponding entries for cash receipts details were found in the note book..............
17. They have written orders received for the supply of looms in the slips and supply if made the date of delivery and receipt of cash payments are entered in the note book. On the basis of the entries found in the note book the Assessing Officer also assessed in the Revised assessment orders for 96-97, 97-98, 98-99.
18. In so far as the slip No.3 is concerned that the entry in the name of Jedarpalayam Paramasivam is assessed to tax in three assessment years and in the present revised assessment order also assessed twice-one on the basis of entry made in the slip and another in the basis of the entry found in the Page No.90 of the note book.
In view of the above the appellants are eligible for deduction from the actual suppression as shown below:-
Turnover eligible for deduction:
Sales Suppression of 35 looms were estimated as per Slip No.2.
But as per slip only 32 looms are entered.
So there is wrong assessment on 3 looms 3 x 24000 = 72000-00 ADD: Equal = 72000-00 -------------- 144000-00 1,44,000-00 Corresponding Value (purchase) of raw materials 72000 x 100 -------------- = 53333-00 135 ADD: Equal = 53333-00 -------------- 106666-00 1,06,666-00 -------------- 2,50,666-00 2) Estimated sales suppressed of 16 powerlooms on the basis of entries found in slip No.2 which were assessed to tax in previous assessment year as per D7 note book. 16 x 24000 3,84,000-00 ADD: Equal 3,84,000-00 --------------- 7,63,000-00 Corresponding purchase value of Raw materials 384000 x 100 -------------- = 2,84,444-00 135 ADD: Equal = 2,84,444-00 --------------- 5,63,888-00 ---------------- 15,87,554-00 3) Estimated sales suppression of 15 looms (out of 36 looms as per slip No.3) which were assessed per slip in the previous years as per D7 note book. 15 x 24000 = 3,60,000-00 = 3,60,000-00 -------------- 7,20,000-00 Corresponding purchase value of Raw materials 3,60,000 x 100 ------------------ = 2,66,666-00 135 ADD: Equal = 2,66,666-00 5,33,332-00 4) Deletion of equal addition made on the estimated sales suppression of 16 looks as per slip No.2 3,84,000-00 ADD: Equal sales suppn. made on the basis of entries made in slip No. 3-21 looms 3,04,000-00 --------------- 8,88,000-00 Corresponding purchase value of raw materials 888000 x 100 ---------------- 6,57,777-00 135 5) Deletion of equal addition made towards inspection discrepancies (20387-00 + 15101-00) 35,488-00 6) Deletion of equal sales suppn. assessed on the basis of entries found in D7 note book 2,02,850-00 ADD: corresponding purchase value of raw materials 202850 x 100 ---------------- 1,50,260-00 135 7) Deletion of equal addn. made on the basis of stock discrepancies (20387-00 + 15101-00) 35,488-00 ------------------ Turn over eligible for deduction from assessment Rs.48,10,749-00 ------------------- Taxable turnover arrived at by the Assessing Officers sales suppression of powerloom spares as per slip No.2 and 3 and entries found in D7 note book Rs.19,06,850-00 ADD: Equal Rs.19,06,850-00 Purchase Value of raw materials 1906850-00 x 100 --------------------- = 1412481-00 135 ADD: Equal = 1412481-00 -------------- Rs.28,24,962-00 Value of stock discrepancies found Rs. 20,387-00 ADD: Equal Rs. 20,387-00 Corresponding purchase value raw materials 20387 x 100 -------------- = 15101-00 135 ADD: Equal = 15101-00 --------------- Rs. 30,202-00 -------------------- Estimated suppression as per the order : Rs.67,09,638-00 Turnover eligible for deduction : Rs.48,10,749-00 --------------------- Suppression sustained : Rs.18,98,889-00 ---------------------
19. Then coming to the equal addition made by the Assessing Authority to the actual suppression the appellant have contended that they have very much co-operated with the Department in producing the books of accounts and accepting actual suppression as found in D7 note book a lenient view may be taken.
20. I have examined the issue in detail. The Enforcement Wing have recovered certain D7 records in which all the clandestine transactions of the appellant for the four years were unearthed and they have been brought to the tax net. There is no other material to prove that the appellants could have restored to similar practice. As per the decision reported in 29 STC 675 in the case of STANDARD MERCHANTILE COMPANY vs. State of Bihar.
"When the clandestine book of accounts seized during inspection, possible estimated suppression of sales turnover is not valid."
21. It has also been held by the High Court of ORISSA IN HARDAYAL GOVIND PRASATH Vs. STATE OF ORISSA reported in 58 STC 77 that "enhancement of turnover after rejecting the accounts must have reasonable nexus to available materials on record."
22. In all these appeals relating to four years the Department has not established that the appellants have restored to similar pattern of suppression throughout the year. In the circumstances, as per the decision quoted above equal addition made is not legally sustainable and therefore it is ordered to be deleted. However, some addition is necessary to the actual suppression in the interest of justice, I direct the Assessing Authority to add 5% to the actual sales turnover now sustained. Accordingly the turnover to be assessed for all the four years is modified as shown below:-
A.P.142/2000(95-96):
Suppression sustained .. Rs.13,79,939-00 @ 4% ADD: 5% for similar omission .. Rs. 68,997-00
---------------------
Rs.14,48,936-00 @ 4%
---------------------
A.P.293/2000(96-97) .........
A.P.324/2000(97-98) .........
A.P.536/99 (98-99):
Actual suppression ordered to be
sustained .. Rs.18,98,889-00
ADD: 5% for similar Omission .. Rs. 94.944-00
ADD: Turnover assessed as per
original asst. order .. Rs. 1,93,700-00
ADD: 1% as per original asst. order .. Rs. 1,937-00
-------------------
Taxable turnover refixed .. Rs.21,89,470-00
-------------------
PENALTY: As the actual suppressed as modified, had been sustained the Assessing Authority is directed to work out the penalty on the actual suppression now sustained as per the provisions of section 12(3)(b) of the TNGST Act.
In fine the appeals are modified."
10. Against the above order of the Appellate Authority, the dealer filed appeals before the Appellate Tribunal. Upon hearing the rival parties, the Tribunal, vide common order dated 30.05.2003, held as follows:
"9. Since the issues involved in the above appeals are one and the same, and as well as the learned Authorised Representative for the appellant is also one and the same person, it is decided to pass a common order for the sake of convenience.
10. We have heard the arguments of both the sides and perused the connected records. The learned Additional State Representative would argue to sustain that of the order of the Appellate Assistant Commissioner. On a perusal of the assessment records, it is found that the place of business of the appellant was inspected by the Enforcement Wing Officers on 4.9.98. There were minimum stock discrepancies and the officers have also recovered three slips and one pocket note book which contained particulars relating to the business transactions. The appellant deposed before the Enforcement Wing Officers in respect of the entries found in the incriminating records. It is found that the appellant had accepted that the sales were made outside the accounts, has disputed some entries stating that the in some cases, even though advance amount was received, no supply of looms were made.
11. On further perusal of the entries in the note book we find that in some place of the appellant has noted as "thg!;". But the Assessing Officer has proceeded to work out the suppression ignoring the term "return" "thg!;".
12. Basing on the above inspection, D3 proposals, were received from the Enforcement Wing and on the basis of the said proposals, the Assessing Officer revised the assessment for the assessment years 1995-96 and 1996-97 and passed assessment orders in respect of the assessment years 1997-98 and 1998-99 respectively.
13. On appeal, the first appellate authority has modified the turnover relating to the four years with the following observations:
"The Enforcement Wing have recovered certain D7 records in which all the clandestine transactions of the appellant for the four years were unearthed and they have been brought to the tax net. There is no other material to prove that the appellants could have resorted to similar practice. As per the decision reported in 29 STC 675 in the case of Standard Mercantile Company V. State of Bihar:
"When the clandestine book of accounts seized during inspection, possible estimated suppression of sales turnover is not valid".
It has also been held by the High Court of Orissa in Hardaya Govind Prasath V. State of Orissa reported in 58 STC 77 that:
"Enhancement of turnover after rejecting the accounts must have reasonable nexus to available materials on record."
In all these appeals relating to four years the Department has not established that the appellants have resorted to similar pattern of suppression throughout the year. In the circumstances, as per the decision quoted above equal addition made is not legally sustainable and therefore it is ordered to be deleted. However, some addition is necessary to the actual suppression in the interest of justice, direct the Assessing Authority to add 5% to the actual sales turnover now sustained.
14. Thus, after due verification of the connected D7 records with reference to the explanations of the appellant, the first appellate authority has modified and revised the suppressed turnover as given below:
Asst.Year 1995-96:
Suppression sustained .. Rs.13,79,939/- at 4% ADD: 5% for similar omission .. Rs. 68,997/- ------------------ .. Rs.14,48,936/- at 4% ------------------ Asst. Year:1996-97: Actual suppression ordered to be sustained : Rs.54,24,157/- @ 4% ADD: 5% for similar omissions : Rs. 2,71,208/- ------------------ Taxable Turnover refixed : Rs.56,95,365/- @ 4% ------------------- Asst. Year : 1997-98: Actual Suppression ordered to be sustained : Rs.29,12,585/- ADD: 5% for similar omission : Rs. 1,45,629/- Turnover assessed as per original assessment Rs. 5,00,666/- ADD: 1% made in the assessment order Rs. 5,007/- -------------------- Taxable Turnover refixed : Rs.35,63,887/- @ 4% -------------------- Asst. Year: 1998-99: Actual suppression ordered to be sustained : Rs.18,98,889/- ADD : 5% for similar omission : Rs. 94,944/- ADD : T.O. assessed per Original asst.Order : Rs. 1,93,700/- ADD : 1% as per original asst. order : Rs. 1,937/- ------------------- Taxable Turnover refixed : Rs.21,89,470/- @ 4% ---------------------
Since the actual suppression has been modified, the first appellate authority has set aside the penalty levied u/s 12(3)(b) of the TNGST Act and directed the Assessing Officer to work out the penalty to actual suppression now sustained by him.
15. The learned Authorised Representative at the time of hearing of the above appeals has restricted his claim against the turnovers disputed in the grounds of appeal, as noted below:
-----------------------------------------------------------------------------Appeal No. Turnover disputed in Turnover of dispute & Year the grounds of appeal restricted at the Rs. time of hearing Rs.
-----------------------------------------------------------------------------CTA 54/02
(1995-96) 14,48,936/- 3,31,853/- CTA 56/02 (1996-97) 56,95,365/- 1,95,424/- CTA 57/02 (1997-98) 30,58,014/- 5,05,950/- CTA 55/02 (1998-99) 19,93,833/- 14,12,015/-
-----------------------------------------------------------------------------
16. The learned Authorised Representative would argue that the appellant has generally admitted those entries relating to the sale of power-loom spares outside the accounts. But in some of the cases, there were simultaneous entries both in D7 slips and in the book and therefore while working out suppression in such cases, the Assessing Authority should have taken into consideration any one of the entries only and not both for the purpose of assessment; that most of the entries were in the nature of order (enquiry); considerable entries relate to sales and some other entries reflect pure cash transactions. It is the contention of the learned Authorised Representative that the claims now made are not related to any actual sales and would further contend that the proportionate purchase value of spares estimated in respect of sales of spares to the deleted as there is no proven suppression u/s.7A.
17. The learned Authorised Representative has putforth his arguments as given below:-
CTA No:54/2002 (1995-96) Page No: 1 : (D7 note book) i. V.S.V.Banesan - 8.4.95 brought forward Rs. 12,265/-
ii. Page No.13 - Chennaiappan - 2.3.96 Rs.1,59,000/-
----------------
Rs.1,71,265/- ----------------
The learned Authorised Representative would state that there were no specific entries suggesting that these amounts were receivable from person for sale of looms. Thus, he would argue that in the absence of any entries warranting sales of looms as specified in other entries, the assessment as sales of looms and the corresponding purchase suppression are liable to be set aside. It is also the contention of the learned Authorised Representative that apart from the above, the proportionate purchase value of spares in respect of sales of spares on a turnover of Rs.24,196/- relating to 1995-96 is also to be set aside.
18. On a careful perusal of the D note book, we could find that there is a brought forward entries of Rs.12,285/- on 8.11.95 in respect of Thiru.V.S.V.Ganesan (Page No.1 of the note book) and as well there is brought forward entry of Rs.1,59,000/-) on 2.3.96 in the account of Chennaiappan (vide Page No.13 of the D7 note book). Thus, it is fool proof that the said entries not actually related to any sale but only related to brought forward entries.
19. Similarly, we could also see that there is force in the argument of the learned Authorised Representative that when the sales of spares are assessed to tax, there cannot be any room for assessing the proportionate value of the spares. In this regard, the learned Authorised Representative has also furnished detailed particulars of sale of spares amounting to a total sum of Rs.24,186/-. Therefore, under the given facts and circumstances of the case, the appellant is entitled to a relief as summed up below, relating to the assessment year 1995-96:-
I. Estimated sales suppressions:
Page No.1 .. Rs. 12,265/-
Page No.13 .. Rs.1,59,000/-
----------------- Rs.1,17,265/-
II. Estimated purchase suppression:
1,71,265 x 100
-----------------135
(As adopted in Assessment Order) Rs.1,26,863/-
-----------------
Rs.2,98,128/-
5% addition proposed by the AAC: Rs. 14,906/-
-----------------
Turnover liable to be deleted (I+II) Rs.3,13,034/-
Brought forward Rs.3,13,034/-
III. Sales of spares as per entries in
D7 note book (Details furnished
by the AR) Rs.21,196/-.
The assessment on proportionate
purchase suppression to be deleted:
21,196.00 x 100
------------------
135 Rs.17,923/-@ 4%
5% addition proposed by the AAC Rs. 896/-
-----------------
Total T.O. wrongly assessed (I+II+III) Rs.3,31,853/-
-----------------
CTA No.56/2002(1996-97)
(Page No.25 of D7 Notebook:
20. ............
CTA No.57/2002(1997-98)
(Page No.48 of D7 Notebook:
21. ............
(Page No.52 of D7 Notebook:
22. ............
(Page No.54 of D7 Notebook:
23. ............
CTA No.55/2002(98-99):
24. The learned Authorised Representative would argue that the slip No.3 contains only enquiries from the prospective buyers and if the supplies were actually made then the money transactions would have been entered in the D7 note book. It is pointed out that the first appellate authority has deleted such estimation and equal additions in respect of the entries found in D7 slips in Sl.No.1,3,4,5,6,8,9,10 and 11 and in respect of entries found in Sl.Nos.2,6,7,9 and 12, he rejected the pleas of the appellant and sustained the turnover. He would further argue that the once the enquiries are accepted they used to enter the prospective buyers name in the note book for the purpose of getting cash. The entries found in all the pages of D7 note book reflected this type of transactions and in such circumstances, if the name found in the slip did not figure in the D7 note book, it would mean that no supplies were made by the appellant. Thus, it is contented that in the absence of any materials to support the contentions of the Assessing Officer, the addition and estimation of sales suppression of 16 looms and proportionate suppressions of spares are unjustified and against the principles of natural justice.
25. On a perusal of the assessment records, it is found that at the time of processing of the said slips on 23.10.98 (slip No.3), the learned Authorised Representative has deposed that the names of the persons who are in need of looms have been noted in this slip. Further, he has stated that he is unable to say whether supply has been made to the parties or note. It was also specifically pointed out that no order forms have been maintained. The processing Officer have also made his findings that the learned Authorised Representative was not able to say whether supply has been made or not. From the above, it is obvious that at no point of time the appellant have admitted the sale of looms through the alleged entries found in the said slip. On the other hand, there was also no concrete and clinching evidence to prove that sales have been effected through the entries found in the said slip. It is also pertinent to point out that the first appellate authority has also deleted similar estimation made in respect of the other entries found therein. Therefore in the absence of any other material to support the contention of the Assessing Officer, the addition and estimation of sales suppression of 16 looms and proportionate purchase suppressions of spares are found to be unwarranted. The learned Authorised Representative has also furnished such details regarding sales of power loom spares to an extent of Rs.10,650/- and therefore as rightly claimed by the appellant, the assessment made on the proportionate purchase value of spares in respect of such sales of spares found to be in called for. Thus, the appellant is entitled for the relief as worked out below:-
I. Estimated sales value of 16 loom x 24000 each (Rs.384000/- + Equal Rs.384000/-) Rs.7,68,000/-
Proportionate purchase value of spares 7,68,000.00 x 100
---------------------
135 Rs.5,68,888/-
-----------------
Rs.13,36,888/-
II. Proportionate purchase value of
spares with reference to Rs.10650/-
Sale of spares (details furnished
by the AR)
10,650.00 x 100
-------------------
135 Rs. 7,888/-
------------------
Rs.13,44,776/-
III. 5% addition proposed by AAC Rs. 67,239/-
------------------
Turnover to be deleted (I + II + III) Rs.14,12,015/-
------------------
26. Thus, the following reliefs are granted in respect of the assessment year as noted below:
I. 1995-96 Rs. 3,31,853/-
II. 1996-97 Rs. 1,95,424/-
III. 1997-98 Rs. 4,16,751/-
IV. 1998-99 Rs.14,12,015/-
27. In as much as the turnover has since been modified, the penalty so levied u/s 12(3)(b) of the Act is also set aside and remitted back to the Assessing Officer for denote fresh disposal as deemed fit under law.
In fine, all the four appeals stand modified."
11. From the records it could be seen out that the Assessing Authority, based on the incriminating records (one note book and certain slips) relating to the business, recovered during the inspection conducted by Officers of Enforcement Wing, on 04.09.1998, at the place of business of the dealer, the Assessing Authority determined the total and taxable turnover of the dealer and made equal addition, for such probable omission and rejected the objection raised by the dealer that the entries were only orders received for supply of looms as there was no order forms and further stated that the dealer was not able to correlate any entry towards supply of looms or cancellation of orders as the case may be.
12. As against the determination of the total and taxable turnover against the reported total and taxable turnover, the dealer filed appeals before the Appellate Assistant Commissioner (CT), Erode. In the appeals before the Appellate Authority, though the dealer accepted the actual suppression as found in D7 note book, contended that there is no concrete basis to make an equal addition. The dealer also questioned the way in which suppressions were worked out in some of the transactions which find place both in D7 slips and in D7 note book, though they represented a single sales. The Appellate Authority also found that entries from Sl.No.3,4,5,6,8,9,12 in slip No.2, were similar to the entries, as found at Page Nos.31,22,37,20,53 and 44 respectively in D7 note book and the dealer in the grounds of appeal, as well as at the time of hearing, correlated the entries. The name and number of looms reflected in both D7 slips and D7 note book were one and the same. Thus, the Appellate Authority after analyzing the entire records and submissions of the parties, deleted the equal addition made by the Assessing Authority and remanded the matter back to the Assessing Authority with a direction to add only 5% to the actual sales turnover for actual suppression.
13. Before the Tribunal, the main contention of the dealer is that most of the entries were in the nature of orders relating to sale of one and the same item, which the Assessing Authority has taken note of for the purpose of arriving the suppressed turnover and assessment was also made in relation to unfructified sales. Further, most of the consumers have turned down the orders placed by them and that they had received back the advance amount paid to the dealer, which, the Assessing Authority has not considered. Further it is contended that when sale of spares is assessed to tax, there cannot be any room for assessing the proportionate value of the spares. The Appellate Tribunal, after detailed analysis of facts, as stated supra, modified the turnover and remitted the matter to the Assessing Officer for de novo disposal.
14. Appellate Authority and Tribunal are the final fact finding authorities and both the Appellate Authority and the Tribunal have properly analysed the facts and evidence. There is no perversity in the finding, warranting interference by this Court.
15. Accordingly, Tax Case Revision Petitions are dismissed. No costs.
[S.M.K., J.] [M.G.R., J.]
28.03.2018
Index : Yes/No
Internet : Yes/No
dm/kk
To
The Tamil Nadu Sales Tax Appellate Tribunal
(Additional Bench),
Coimbatore - 18.
S.MANIKUMAR, J.
AND
M.GOVINDARAJ, J.
dm/kk
T.C.(R) Nos.74 & 75 of 2018
28.03.2018