Madras High Court
The State Of Tamil Nadu vs Tvl. Subha Furniture 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 HON'BLE MR.JUSTICE S.MANIKUMAR AND THE HON'BLE MR.JUSTICE M.GOVINDARAJ T.C.(R).No.72 of 2018 The State of Tamil Nadu, represented by the Deputy Commissioner (CT), Salem Division, Salem. .. Petitioner Vs. Tvl. Subha Furniture, 22, Yahoop Street, Gobichettipalayam. .. Respondent Prayer: Tax Case Revision is filed under Section 38 (1) of Tamil Nadu General Sales Tax Act, 1959, to revise the order dated 03.07.2003, passed in C.T.A.No.108 of 2003, on the file of the Sales Tax Appellate Tribunal (Additional Bench), Coimbatore. For Petitioner : Mr.V.Haribabu Addl. Government Pleader (Taxes) ORDER
(Order of this Court was made by S.MANIKUMAR, J.) Tax Case Revision is filed to revise the order dated 03.07.2003, passed in C.T.A.No.108 of 2003, on the file of the Sales Tax Appellate Tribunal (Additional Bench), Coimbatore.
2. Short facts leading to the Tax Case Revision are that the respondent, Tvl. Subha Furniture, dealer in Steel Furniture, were finally assessed for a total and taxable turnover of Rs.31,43,046/- and Rs.3,25,526/- respectively for the year 1999-2000 under the Tamil Nadu General Sales Tax Act, 1959. Penalty of Rs.2,44,145/- was levied under Section 16(2) of the said Act.
3. Aggrieved by the same, the respondent preferred an appeal in A.Nos.122 and 123 of 2002, before the the Appellate Assistant Commissioner(CT), Erode. Vide common order dated 01.10.2002, the Appellate Authority dismissed the same as hereunder:-
"1. I heard Thiru A.Jaganathan, B.Com., FCA and Authorised Representative for the appellants at the time of hearing has argued that there is only quoted figures for the price of furniture and there was no sale of any articles thereof and Thiru P.Arulanandam, B.Sc., learned Departmental Representative for the department on the other hand relying on the orders of the Assessing Authority pleaded to sustain the assessment. The connected records and files were perused.
2. As the appellants, the learned Authorised Representative for the appellants and the issue involved are one and the same a common order is passed for the sake of convenience.
3. The question to be decided is whether the entries found in the recovered records actually relate to sale of furniture as contended by the Assessing Authority.
I have examined the D7 records and found that the slips numbered 2 and 6 are not quotations, and the figures found in some of the D7 slips (Page - 2 of the assessment file) are nothing but amount for which sale was effected bringing into regular accounts. I also find that the accounted for transactions were found written in the slips. The diary recovered by the inspecting Officers on the day of inspection from the place of business of the appellants found written with details of buyer, date of sale and payment. At this juncture, it is a mute question why the order slips were not dotted with sale amount, and the formal conclusion one would naturally arrive at this instance is that since a few entries were written with details of sale amount, the remaining slips with quoted figures are indicative of concluded sales. This conclusion will be based on the fact that there are certain sales details found in some of the slips. The over all conclusion will be one which stand proved on sales suppression. The appellant failed to prove their case with concrete evidence that there was no sales, and the D7 records (entire quotations) recovered in connection with their business activities are more quotations only. In fact all the quotations are not quoted figure and there are certain sales in them under accounting. This kind of behaviour lends strength to conclude that the quotations are sales only. In view of this finding it is concluded that the quotations are sales details. The Assessing Authority has clearly assessed these taxable turnover under escaped category as per section 16 of the Act. In these cases, sales have been effected outside the accounts with the personal knowledge of the appellants and it is therefore upto them to prove that the entries contained in the D7 records had no connection with their business. In the records recovered, there are details regarding purchases, sales, description of the articles and the names of buyers together with payment particulars. It cannot therefore be said that the entries contained in D7 records are only quotations and not completed or consumed sales as argued by the learned Authorised Representative. The inspection has resulted in recovery of voluminous records and on scrutiny the Assessing Authority has taken cognizance of the entries which had direct bearing cogent relationship with purchases or sales. The department has proved it's case with strong evidences. I, therefore find there is no valid reason to interfere with the assessment made on the actual sales suppression as per D7 records of Rs.15,71,523/- in respect of A.P.No.123/2002 and Rs.13,24,173/- in respect of A.P.122/2002 and it is ordered to be sustained.
With regard to the addition made at equal time in so far as A.P.122/2002 and A.P.123/2002 are concerned it can be said that Assessing Authority himself has recorded that the D7 records recovered from the place of business related to sales of goods effected by them but suppressed them from accounts under the guise of "quotations" and evaded tax payment for the assessment years 98-99 and 99-2000. The department has proved that there was a nexus in the pattern of suppression. I therefore, find that addition made at equal time towards actual suppression in both the cases are also ordered to be sustained.
6. Under these circumstances the revised order on Rs.26,48,346/- for the year 98-99 and Rs.31,43,046/- for the year 99-2000 under section 16 of the TNGST ACT is sustained and there is no need for any interference with the orders for the said years.
In fine, both appeals are dismissed."
4. Aggrieved by the same, the respondent filed appeals in A.Nos.65 and 108 of 2003, before the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Coimbatore. Vide common order dated 03.07.2003, the same were partly allowed and partly remanded, as hereunder:-
"1. We have heard the arguments of both the sides and perused the connected records. The ld. Addl. State Representative would argue to sustain that of the order of the Assessing Officer. On a perusal of the assessment records, it is found that the appellant's place of business was inspected by the Enforcement Wing Officials on 13.10.99 and found that the appellant had effected purchase of household articles such as fans, wet grinders, mixie, television etc., from within the State and sold them, only locally. It was also found that the appellant had not effected any inter-state purchases or sales. During the course of inspection, the inspecting officers recovered from the business place of the appellant, the following D7 records relating to the assessment years 1998-99 and 1999-2000:
i. Book Marked "A"- (Relating to 98-99 & 99-2000 said to be quotations) ii. Book Marked "B"- (99-2000 said to be Quotations) iii.Book Marked "C"- (98-99 - said to be quotations) iv.Book Marked "D"- (99-2000 - said to be quotations) v. One Diary - Written pages - 18,19,22,23 to 33,35,36,37,39,to 47,49,51,53, 55,57,61,63,65,67,69,73,81, 317,326,328 to 330, 332 to 338 (Rest are unwritten).
2. At the time of processing of the D7 records on 26.9.2001, the appellant had stated that the books recovered from the business place i.e. book marked A,B,C and D were all quotations issued to his customers and no sale was involved in these items.
3. In respect of the slips recovered at the time of inspection, the appellant had deposed that it is only a quotation issued to the customers and no actual sale transaction is effected through them.
4. In respect of the Diary recovered, the appellant had totally disowned the Diary, stating that some one had misplaced the diary in his shop at the time of his visit. However, the processing Officers negatived the explanations offered by the appellant and thereby formulated a "D3" proposal for the following reasons:
i. The said quotation issued to the customers did not contain the complete address so that verification cannot be possible as to whether the items specified in the quotation as actually been sold on the future date;
ii. The appellant has suppressed the turnover and evaded the payment of tax in camouflaging the actual sales in the form of so called quotations;
iii. Expecting the sales, against 21 items noted in the D7 records (A,B,C and D) which were duly accounted for in the books of accounts as second sales, in the monthly returns, the remaining quotations are treated as sales suppression.
5. The processing Officers have also negatived the pleas of the appellant in respect of the diary recovered at the time of inspection that the version of the dealer is not acceptable one. Thus, the Enforcement Wing Officers have made a proposal determining the suppressed turnover at Rs.26,48,346/- and Rs.31,43,046/- besides levying penalty of Rs.2,07,273/- and Rs.2,44,145/- respectively in respect of the assessment years 1998-99 and 1999-2000.
6. On the basis of the 'D3' received from the Enforcement Wing, the Assessing Authority assessed the suppressed turnover to tax as given below:
7. The issues involved in the above appeals are as follows:
I. CTA 65/03 (98-99) (1) (a) Suppressions as per entries in the book markedA & C Rs.11,57,630/-
(b)Add: Equal addition for probable omissions Rs.11,57,630/-
-----------------
Rs.23,15,260/-
(2) (a) Suppression as per the entries in 'Diary' Rs.1,66,543/-
(b)Add: Equal addition for probable omissions Rs.1,66,543/- ---------------- Rs.3,33,086/- (3) Penalty levied u/s.16(2) of the Act Rs.2,07,273/- II.CTA No.108/03 (1999-2000): (1) (a) Suppressions as per entries in book marked A, B, & D Rs.8,21,529/- (b) Add: Equal addition for probable omissions Rs.8,21,529/- ------------------ Rs.16,43,058/- (2) (a) Suppressions as per the entries in the Diary Rs. 5,35,584/- (b) Add: Equal addition for probable omissions Rs.5,35,584/- ----------------- Rs.10,71,168/- (3) (a) Suppressions as per slips recovered (4 Nos.) Rs.1,78,310/- (b) Add: Equal addition for probable omissions Rs.1,78,310/- ----------------- Rs.3,56,620/- (4) (a) First Sales of goods not suffered tax Rs. 36,100/- (b) Add: Equal addition for probable omissions Rs. 36,100/- ------------------ Rs. 72,200/- (5) Penalty levied u/s.16(2) of the Act Rs.2,44,145/-
8. The appellant is a dealer in furniture and household equipment and the appellants purchases and sales are only within the State of Tamil Nadu. There are no inter-state purchases or sales. On the basis of the 'D7' records recovered at the time of inspection of the appellants place of business on 13.10.99, the suppressions have been estimated for the assessment year 1998-99 and 1999-2000. On a perusal of the assessment records (between pages 171 and 187 of the assessment file) it is noticed tht the person incharge of the business at the time of inspection held on 13.10.99, has given the following statements:
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9. From the above statement, it is evident that the appellant is a dealer in furniture and household equipments who in fact effected purchases and sales of goods within the state only. No inter-state purchases or sales were effected by the appellant, which fact was also admitted by the inspecting officers. The ld. Authorised Representative for the appellants would argue that the alleged entries in the book marked A,B,C and D are only quotations given to customers and no sales have been effected. He would further insist that the alleged book would reveal that it is only quotation and there are no credit entries in the book marked A, B,C and D to denote it is sales. He would also emphasis the point that even before the inspecting officials, the appellant had very clearly stated that it was only a quotation and the Department has also not proved anything contrary to it. Thus, he would argue that the estimations made relying on the entries in the books marked A,B,C and D are not correct and thereby prayed to delete the same.
10. With regard to the suppression estimated relying on the entries contained in the diary recovered, the ld. Authorised Representative would argue that the appellant has got no knowledge about the entries in the diary since the diary does not belong to the appellant concerned. It is claimed that somebody who had come to the business place had left the same and which fact has also been narrated before the processing officers and hence the entries contained in the diary cannot be taken for estimating the suppression and it should not also be assessed in the hands of the appellant.
11. With regard to the suppression estimated relying on the entries contained in the slip nos.2,6,9 and 10, the ld. Authorised Representative would argue that it is only a quotation and it does not conclude any sales. Thus, he has made the prayer before this Tribunal to set aside these suppressed turnover so assessed by the Assessing Officer and sustained by the first appellate authority. The ld. Authorised Representative has also further pleaded for the deletion of the equal addition and the penalty levied there upon stating that since there is no escapement of turnover all the suppressions are only estimated figures and not proved one.
Issue No.I (Suppression as per entries in book marked A,B,C & D):
(I) CTA No.62/03 (98-99):
1(a) Suppressions as per entries in the book marked A & C Rs.11,57,630/-
(b)Add: Equal addition for probable omissions Rs.11,57,630/-
------------------
Rs.23,15,260/-
(II) CTA No.108/03 (1999-2000) I(a) Suppressions as per entries in book marked A,B, & D Rs. 8,21,529/-
(b) Add: Equal addition for probable omissions Rs.8,21,529/-
------------------
12. It is the contention of the ld. Authorised Representative that the entries contained in the book marked A,B,C and D are only quotations given to customers and in fact no sale has been effected through them. At the time of processing of the above records on 26.9.2001, the proprietor of the appellant concern Thiru S.M.Venkatachalam, who appeared before the processing Officer, has specifically stated that it was only a quotation and the estimation made on the basis of the entries found in the said records was not based on any facts. He further pleaded that the estimation so made on the entries contained in the said records, was not correct and thereby prayed to delete the same. However, the inspecting officers declined to accept the statement of the appellant and proposed to go ahead with the estimation for the reason that the said quotation issued to the customers did not contain the complete address so as to enable them to undertake the verification as to whether the items specified in the quotation had actually been sold on a future date.
13. On a perusal of the said records (book marked A,B,C and D) we could able to find that in many cases, appellant had given complete and verifiable address in the alleged proforma invoice for quotation, which the processing officers failed to verify and ascertain the fact of the case. However, we have felt it important to note down certain of the alleged-quotations issued to the customers, wherein complete and clear addresses were given in the following instances.
Book Marked 'A' :
No.2 dt. 15.2.99, 7 dt.19.2.99, 13 dt.18.2.99, 26 dt.9.3.99, 28 dt.9.3.99, 29 nil dt. Nil 32 dt.18.2.99, 49 dt.24.4.99, 66 Nil dt.67 Nil dt. etc., Book Marked 'B' :
No.2 dt.8.6.99, 7 dt.8.6.99, 29 Nil dt.36 dt.22.7.99 46 dt.29.7.99 etc., Book Marked 'C' :
No.17 Nil dt-18 Nil dt.33 dt.23.11.98, 34 dt.23.11.98 37 Nil dt., 66 and 67 dt.21.12.98 (continuous bill) 68 dt.22.12.98, 89 Nil dt.98 dt.1.2.99 dt.1.2.99 etc., Book Marked 'D' :
No.1 dt.5.10.99, 4 Nil dt., etc.,
14. It is clear from the above that the appellant had issued the alleged quotations to the customer concerned, which contained the complete address, wherein, the Assessing Officer failed to verify and ascertain the true nature of the transactions held by the appellant. However the Assessing Officer has held it as sale of goods on mere presumptions and assumptions only. It is also evident that the Department has not proved contrary to the claim of the appellant that it was only a quotation.
15. Moreover, it is evident from the scrutiny of the records that wherever the actual sales are materialised through the alleged quotations issued, the appellant has duly issued the sale bill and account for the same in his book of accounts. Thus, the appellant had issued sale bills in 10 Cases during 1998-99 for a second sales amount of Rs.1,36,845/- and similarly in all cases during 99-2000 for a second sale amount of Rs.64,910/-. Thus, the sales were effected and duly accounted for the same by the appellant, for the quotation issued during 98-99 and 99-2000 as follows:
Book Marked 'A' :
Quotations 1998-99 :
No.1 dt. 15.2.99, 16 dt. 21.2.99, 17 dt.20.2.99 and 35 dt. 29.3.99.
Quotations 1999-2000 :
No.45 dt. 17.4.99, 56 Nil dt.61 Nil dt. and 66 Nil dt., Book Marked 'B' Quotations 1999-2000 :
No.03 dt.22.6.99, 04 dt.22.6.99 12 dt.1.7.99, 48 Nil dt. 49 dt.30.7.99, 88 dt.24.9.99 and 89 dt.24.9.99.
Book Marked 'C' :
Quotations 1998-99 :
No.47 dt. 2.12.98, 68 dt.22.12.98 69 dt.16.11.98 90 Nil dt. 95 dt 30.1.99 and 99 dt.1.2.99.
Thus, it is well proved that wherever sales have been materialised through the quotations issued, the appellant had issued sale bills and thereby duly accounted for the said transactions in his book of accounts.
16. Thus, from the above, it is evident that from the very beginning the appellant was claiming it to be only quotations issued to the customers and that the cross check verifications of the connected D7 records have also revealed the fact that wherever the transactions are materialised, the appellant has duly accounted for the same in his book of accounts. In this context, the Revenue has not proved anything contrary to it, but relying on the entries in the alleged book marked A,B,C and D and made the estimations, merely on assumptions and on strong suspicion.
17. The Supreme Court of India in the case of State of Kerala V.M.M.Mathew and Another reported in 42 STC 348 has held as follows:
"Strong suspicion, strange coincidences and grave doubts cannot take the place of legal proof. To establish the charges against the respondents, it was essential for the prosecution to establish that the secret books of account related to the business transactions carried on by the respondents and none else. The prosecution could have established it in a variety of ways, viz., (1) by a adducing satisfactory proof to the effect that the place from which the books were seized formed part of the place of business of the respondents or was in their exclusive possession and control, (2) that the books were maintained by or under the orders of the respondents,(3) that they were in the handwriting of of either of the respondents or their accountant, or clerk or some other person employed by them. The third method could have been adopted by following one or more of the ordinary modes provided in the Evidence Act for proving the handwriting, i.e.,(i) by calling the accountant or clerk or some other employee of the respondents who had posted the entries in the books, (ii) by calling a person in whose presence the books were written, (iii) by calling a handwriting expert to testify that the entries in the books tallied with the admitted specimen writing of the respondents or any of their employees. (iv) by calling a person acquainted with the handwriting of the person by whom the books were supposed to have been written (v) by having the comparison done in court of the books with some admitted writing as provided in Section 73 of the Evidence Act, (vi) by proof of an admission made by any one of the respondents that the books related to the business transactions carried on by their firm or that anyone of them had written the same, (viii) by adducing other unimpeachable circumstantial evidence. The connection of the respondents with the entries in the books could also have been established by producing some of the customers whose names were found in the books to testify that the deals evidenced by the entries were transacted by them with the respondent."
18. Similarly in the decision reported in 17 STC 465 the Supreme Court of India has held that :
"Judgment is a faculty to decide matters with wisdom truly and legally. Judgment does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though there is an element of guess work in a best judgment assessment, it shall not be a wild one but shall have a reasonable nexus to the available material and the circumstances of each case."
19. Thus, we are of the view that there is no nexus for the Department to connects the entries contained in the alleged quotations with that of the actual transactions held by the appellants and the Revenue has also failed to prove the alleged sale transactions with any material evidences. Therefore in the given circumstances, we set aside the alleged suppressed turnover estimated on the basis of the entries contained in the quotations for Rs.11,57,630/- and Rs.8,21,529/- along with the equal addition made for probable omissions therefore, in respect of the assessment years 1998-99 and 1999-2000 respectively.
Issue No.II : Suppression as per entries in the Diary :
CTA No.65/03 (1998-99):
2(a) Suppressions as per the entries in the Diary Rs.1,66,543/-
(b) Add : Equal addition for probable
omissions Rs.1,66,543/-
-----------------
Rs.3,33,086/-
-----------------
CTA No.108/03 (1999-2000) :
2(a) Suppressions as per the entries
in the Diary Rs.5,35,584/-
(b) Add : Equal addition for
probable omissions Rs.5,35,584/-
------------------
Rs.10,71,168/-
------------------
20. It is evident from the records that the appellant at the time of processing of the D7 records had deposed before the processing Officer that he has no knowledge about the entries in the diary since the diary does not belong to him. He further insisted that somebody who had come to the business place, has left the same and hence the same cannot be taken for estimating the suppression and assessed in the hands of the appellant. However, the inspecting officers have declined to accept his version emphasising the point that the records were recovered from his own business place and hence the entries contained therein only related to his own business activities. It is the observation of the Department that the name of the buyers, date of sale, amount and payment details were noted in the diary, which had proved the daily transactions of the dealer without raising sale invoices for the transactions noted in the said diary. At the time of hearing of the appeal, the proprietor of the appellant concern Thiru.S.M.Venkatachalam, who appeared along with the ld.Authoirsed Representative represented that during the course of inspection, he was not present at the business place and the alleged diary recovered at the time of inspection not belonged to him. He further represented that some one had misplaced the diary in his shop at the time of his visit and thereby pleaded that no estimation could be made on his business transactions basing on the entries contained in the alleged diary. The proprietor had also appeared before the processing officer on 26.9.2001 and deposed that he had no knowledge about the entries contained in the diary as it belonged to someone else. However, the processing officers negatived the pleas of the appellant and thereby, made the estimation of the suppressed turnover on the basis of the recovered diary.
21. On a perusal of the said diary, we could find that there is no evidence to claim it as the appellant's diary but it contained only certain entries such as name of certain persons, date entire figures etc., but nothing was found with regard to the identity of the appellant. Further, certain addressees were also noted therein in page No.336 and 338 of the said diary but no enquiry was found to have been made. However, the appellants disowned the diary and as well the entries contained therein as not related to his business transactions.
22. Material and documents discovered in the course of inspection which, according to the revenue are incriminating in nature, are valid and can be relied upon for the purpose of revising the assessment under this Section, the only necessary prerequisite being that the assessee should be given a fair opportunity to inspect, take notes or copies of such account books or materials discovered and retained by the revenue Sha Hastimal Khimchand V. Deputy Commercial Tax Officer, (1971) 28 STC 255 at page 256 (Madras) following Commissioner of Commercial Taxes Vs. Ramakrishnan Shrikishan Jhaver, (1967) 20 STC 453 (SC). If records not produced, or explanations not given, during inspections, are produced or given during the assessment, they cannot be discarded (Commissioner of Sales Tax V. Shyamlal 7 C., (1984) 57 STC 31 (Allahabad).
23. Natural justice requires a fair opportunity being afforded to a person charged or a person to be taxed to show-cause against the proposal and to state his case. The judicial process does not end by making known to a person the proposal against him and giving him a chance to explain but extends further to a judicial consideration of his representations and the materials and a fair determination of the question involved. (M.Appukutty V. Sales Tax Officer (1966) 17 STC 380 at Page 387 (Kerala).
24. A quasi-judicial tribunal dealing with rights of parties and particularly functioning under a taxing enactment should see that at every possible step, the person aggrieved is not only formally before him but should also make it appear that the aggrieved person is fully equipped with the material so as to object to the proposals of assessment made by the said taxing officer. The opportunity is not an empty formality which has to be observed lightly. Such opportunity should be really effective in the sense that the aggrieved person should be in a position to state his case and object to the proposals on a hypothesis which has to be culled out from his own records and account books. In a situation where such material records are screened from the aggrieved person, but yet he is called upon to state his objections, it cannot be said either in law or in equity that the person who is called upon to state his objections was given an effective, real or fair opportunity to object to the proposed assessment, (T.A.Kuppuswamy Chettiar and Co., V. State of Tamil Nadu (1972) 30 STC 473 at Page 476 (Madras).
25. The High Court of Uttarpradesh in the case of Mittal and Company V. Commissioner of Commercial Taxes, UP reported in 69 STC 42 has held that "though the initial onus to establish that no sale was made by the assessee is on the assessees, no evidence could be adduced for establishing a negative fact. When the assessee denied the fact of sale, the onus shifts to the revenue to disprove the contention of the assessee."
26. In as much as the appellant had been denying the ownership of the alleged diary from the beginning and as well certain addressees of the individual concerned were furnished therein in the diary itself, as a principle of natural justice, we are of the considered view that one more opportunity may be provided to the appellant concerned so as to enable him to represent the case in proper perspective. In the meantime, the Assessing Officer should also make such cross verfication to enquire and establish the fact with regard to the ownership of the diary with appropriate material evidences. Thus, with the above observation, we set aside and remit the turnover back to the Assessing Officer for fresh disposal.
CTA No.108/03 :
Issue No.3(a) Suppressions as per slips recovered (4 Nos.) Rs.1,78,310/-
(b) Add : Equal addition for probable omission Rs.1,78,310/- ---------------- Rs.3,56,620/- 27. With regard to the suppression estimated at Rs.1,78,310/- relating to the entries in the slip nos.2, 6, 9 and 10, the ld. Authorised Representative would state that it is only a quotation and no actual sales were effected through the said slips recovered.
28. On a careful scrutiny of the slip recovered at the time of inspection held on 13.10.99, we could able to find out the following facts:
(a) Slip No.2 :
It is a Nil dated slip contains details of the item of household articles and the amount specified against them for a value of Rs.12,265/- (front page) and Rs.26,970/- on the back side of the above slip. The dealer had stated that this was only a quotation issued to this customer specifying the value of the items and no sale was effected through that slip. The ld. Assessing Officer has treated the same as sales suppression stating that there is no word 'Quotation' in the said slip.
On a careful perusal of the said slip we could find that there is no mention about the date and the name of the customer. However, the revenue could not able to adduce any evidence to state that actual sales have been effected through the said slip. Therefore in the absence of any material evidence, we are of the view that no sale element could be attributed to the above slip. Hence, the sales suppression estimated at Rs.39,235/- along with equal addition for probable omission is ordered to be deleted.
(b) Slip No.6:
It is a Nil dated slip contains entries of certain household articles against which the value has also been noted, amounting to be total sum of Rs.1,12,325/-. On a perusal of the said slip, it is found that the name of the buyer is not found therein but only certain entries regarding the price of the household articles are noted therein. The Revenue has also failed to produce any material evidence to state that the actual sale has been effected through the said slip. Therefore, in the absence of any material evidence, the sales suppression estimated along with the equal addition made therefore is ordered to be deleted.
(c) Slip Nos. 9 and 10:
It is a copy of statement of accounts of M/s.Subha Furniture (in LF 279 and 280) which the appellant claimed it to be the chit amount collected in instalments and it has not nothing to do with the business transactions. Therefore, in the absence of any material evidences produced, the suppression so estimated along with the equal addition made for probable omission is ordered to be sustained.
Relief Granted : Rs.3,03,120/- (Actuals Rs.1,51,560/- Equal addition Rs.1,51,560/-) (Slip No.2 Actual Rs.39,235/- Equal addition Rs.39,235/-)(Slip No.6 Actual Rs.1,12,325/- Equal addition on Rs.1,12,325/-) CTA No.108/03:
Issue No.4 (a) First Sales of goods not suffered tax Rs.36,100/-
(b) Add : Equal addition for probable Omisisons Rs.36,100/-
--------------
Rs.72,200/-
--------------
29. At the time of inspection, the verification of the purchase bills revealed the fact that the first sale of steel furniture to be extent of Rs.36,100/- effected by M/s.G.V.Industries, Gobi had not suffered single point tax at 10% as follows:
Bill No. Description Value 1/15.4.99 S.S.Furniture Rs.2,800/-
2/29.5.99 -do- Rs.2,200/- 4/14.6.99 -do- Rs.1,600/- 5/28.6.99 -do- Rs.2,500/- 22/10.8.99 -do- Rs.4,700/- 49/2.9.99 -do- Rs.22,800/- ------------- Rs.36,100/- -------------
30. The Assessing Officer has assessed the turnover u/s.3(2) of the Act besides adding equal addition for probable omission. The appellant has also admitted the estimations made on the purchase of steel furniture to an extent of Rs.36,100/- along with the equal addition made therefor. The ld. Authorised Representative has also not pressed for the issue at the time of hearing of the above appeal. Therefore the turnover estimated and assessed to tax at Rs.72,200/- is ordered to be sustained.
CTA.No.65/03 : (1998-99) Issue No.(3) Penalty levied u/s.16(2) of the Act Rs.2,07,273/-
CTA.No.108/03: (1999-2000) Issue No.(5) Penalty levied u/s.16(2) of the Act Rs.2,44,145/- 31. With regard to the issue on penalty, in as much as the appeal has since been partly allowed and partly remanded, the penalty levied u/s.16(2) of the Act at Rs.2,07,273/- and Rs.2,44,145/- in respect of the assessment years 1998-99 and 1999-2000 are ordered to be set aside and remitted back to the Assessing Officer for denote fresh disposal as deemed fit under law.
In fine, both the appeals stand partly allowed and partly remanded."
5. Being aggrieved by the abovesaid common order, the State has filed instant Tax Case Revision.
6. Mr.V.Haribabu, Additional Government Pleader (Taxes), submitted that the Tribunal failed to note that there was an inspection of the place of business by the Enforcement Wing Officers which resulted in recovery of D7 records containing business transactions covering the period from 1998-99 and 1999-2000. The records secured was processed which resulted in deletion of suppression and assessment were made based upon the inspection results. The assessment so made, is quite legal and supported by documentary evidences. He further submitted that the Tribunal erred in allowing the appeal in respect of slip Nos. 1,2,3,4 & 5 on the ground that they were only quotations and not concluded sales which is not correct.
7. He further submitted that the Tribunal failed to note that the first appellate authority had rightly dismissed the appeals filed by the dealers after thoroughly examining all the D7 records with the finding that the slips recovered need not be regarded as quotations which is quite justified. This being the case, the Tribunal had without offering any findings allowed the appeals which is bad in law.
8. He further stated that the Tribunal failed to note that during the time of check of accounts and stock at the place of business on 13.10.99, the proprietor's son who was present had deposed that these records contained details of business transactions and he had not denied that ownership of the diary (Page 189 of the assessment file). If really the slips did not relate to the assessee, certainly she would have mentioned it in his deposition. Denying the ownership of the slips at this distance of time is only an after thought. The Tribunal without causing verification had allowed the appeals which is not acceptable.
9. He further contended that the Tribunal failed to note that there were clean evidence available in the assessment records to consider the turnover assessed as clear transactions only. When this being the case, the order of the Tribunal in deleting the assessment along with equal addition with consequent penalty is not legal.
Heard the learned Additional Government Pleader (Taxes) and perused all the materials available on record.
10. On the above grounds, upon perusal of the order of the Tribunal, it could be seen that the appellate Tribunal has threadbare analyzed the entire evidence, including each and every dispatched slips, book entries and arrived at a categorical finding that they are only quotations and not sales, as contented by the revenue. While recording such a finding, the Tribunal has also taken note of the principles of law, enunciated by the Hon'ble Supreme Court in State of Kerala V.M.M.Mathew and Another reported in 42 STC 348 and State of Kerala v. C.Velukutty reported in 17 STC 465. On the materials considered, contentions to the contra, cannot be countenanced and we do not see any perversity in the finding recorded by the Tribunal, warranting reversal.
11. In view of the above, the Tax Case Revision is dismissed. No costs.
[S.M.K., J.] [M.G.R., J.]
28.03.2018
dm
To
The Sales Tax Appellate Tribunal
(Additional Bench), Coimbatore.
S.MANIKUMAR, J.
and
M.GOVINDARAJ, J.
dm
T.C.(R).No.72 of 2018
28.03.2018