Madras High Court
M/S.Jayalakshmi Oil Mills vs The State Of Tamil Nadu on 3 February, 2012
Author: P.P.S.Janarthana Raja
Bench: D.Murugesan, P.P.S.Janarthana Raja
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 03.02.2012 CORAM THE HONOURABLE MR.JUSTICE D.MURUGESAN AND THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Tax Case (Revision) No.1470 of 2006 M/s.Jayalakshmi Oil Mills Annur Coimbatore District .. Petitioner Versus The State of Tamil Nadu rep. by the Deputy Commissioner Taxes (Coimbatore District) Commercial Taxes Building Dr.Balasundaram Road Coimbatore .. Respondent Revision filed under Section 38 of the Tamil Nadu General Sales Tax Act to revise the order of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench) Coimbatore dated 07.03.2001 passed in CTA.No.262 of 1997. For petitioner : Mr.B.Raveendran For respondent : Mr.A.R.Jayaprakash, G.A. O R D E R
(Order of the Court was delivered by P.P.S.JANARTHANA RAJA, J.) The above Tax Case Revision is preferred by the assessee under Section 38 of the Tamil Nadu General Sales Tax Act against the order of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench) Coimbatore dated 07.03.2001 passed in CTA.No.262 of 1997 raising the following questions of law:-
1. Whether the Tribunal is right in sustaining the levy of purchase tax under Section7-A of the TNGST Act, 1959, on the excess stock of groundnut kernel found at the time of the inspection ?
2.In the absence of any suppression of turnover, whether the estimation made for possible suppression on mere surmises is not fair and reasonable ?"
2. The brief facts arising out of the revision is as under:-
The assessee is a dealer in oil, oil cakes, groundnut etc at Jayalakshmi Mills, Annur, Coimbatore District. The assessee declared a total taxable turnover of Rs.23,10,304.70 and Rs.10,38,164.70 respectively in the monthly returns. The relevant assessment year is 1994-95. The account books were checked. It was found that the return filed wa s incorrect and incomplete. Further the place of the business was inspected by the enforcement wing officers on 28.08.1994 and also found certain defects. The defects are stock variation and also certain slips relevant to business transaction were recovered in the inspection. Therefore, the Assessing Officer determined the total taxable turnover of Rs.65,14,972/- and Rs.52,31,342/-. While completing the assessment, the Assessing Officer made addition in respect of stock variation of groundnut and kernel and treated as a first sale of Rs.3,43,400/-. Following additions have been made:-
Stock variation of groundnut and kernel treated as first purchase :Rs.3,43,400.00 First purchase of groundnut and kernel as per slip No.1 :Rs.2,87,344.00 First purchase of groundnut and kernel as per D7 slip No.2 and 3 :Rs.1,16,976.00 First purchases of groundnut kernel as per D7 slip No. 2 and 4 :Rs.2,37,856.00 --------------- Total :Rs.9,85,576.00 Add:Equal amount for probable suppression in view of suppression noticed during inspection :Rs.9,85,576.00 ---------------- Turnover taxable at 3% :Rs.19,71,152.00 ----------------
The assessing officer made equal amount of probable omission in view of the suppression noticed at the time of inspection of Rs.9,85,576/-. Aggrieved by that order, the assessee filed appeal before the Appellate Assistant Commissioner. The Appellate ASsistant Commissioner set aside the turnover relating to Slip No.1 amounting to Rs.2,87,344/- and Slip Nos.2 and 3 amounting to Rs.1,16,976/- with a direction to the Assessing Officer to redo the same. In respect of other addition and equal addition, the Appellate Assistant Commissioner confirmed the same. Aggrieved by that, the assessee filed appeal before the Sales Tax Appellate Tribunal, who confirmed the additions and equal addition and dismissed the appeal. Aggrieved by that order the assessee filed the present revision raising the above questions of law.
3. The learned counsel for the assessee contended that there was no justification for making equal addition for probable suppression. There is no basis for making equal amount addition and therefore, the same is without justification. It is only estimate and not in accordance with law. The learned counsel for the assessee further submitted that he is not pressing question No.1.
4. The learned counsel for the Revenue on the other hand submitted that the Tribunal had considered all the facts and circumstances of the case and came to the conclusion and confirmed the addition on the ground that there is stock variation as well as suppression of the turnover. He further submitted that the order of the Tribunal is in accordance with law and the same shall be confirmed.
5. Heard the learned counsel on both sides and perused the materials available on record. Question No.1 is not pressed by the learned counsel for the assessee. The only issue for consideration in this tax case revision is whether the addition made by the authorities below are justified and also equal addition made by the authorities are based on valid material or not. In respect of the addition, there is factual finding given by the authorities below that the assessee had failed to maintain correct accounts and also had purchased groundnut kernel from undisclosed sources and found excess on the date of the inspection. So, addition of Rs.3,43,400/- was made based upon valid material. Even with regard to levy of tax on a turnover of Rs.2,37,856/- was based on valid material. It was also found that there was excess of stock of oilcakes found by the officers of the enforcement wing. The assessee also unable to give any other material to take a contrary view. Therefore, the order passed by the Tribunal in respect of the addition made based on valid materials and hence, the same is confirmed.
6. The learned counsel for the assessee vehemently contended that equal addition for probable omission in respect of transaction has no basis. After going through the order, we also feel that equal addition is unwarranted. It is only based on estimate that too probable suppression. It is only a guess work. There is no material for making equal amount for probable suppression. Therefore, we confirm the order in respect of addition made by the Tribunal. However, equal addition for probable ommission alone is deleted.
7. In the result, the tax case revision is partly allowed. The second question of law raised is answered partly in favour of the assessee. No costs.
nvsri To
1.The Deputy Commissioner Taxes (Coimbatore District) Commercial Taxes Building,Dr.Balasundaram Road,Coimbatore
2.The Appellate Assistant Commissioner (CT), Coimbatore-18
3.The Tamil Nadu Sales Tax Appellate Tribunal Additional Bench, Coimbatore 18