Madras High Court
M/S.Sri Krishna & Co vs The Assistant Commissioner (Ct) on 12 June, 2014
Author: B.Rajendran
Bench: B.Rajendran
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 12.06.2014 Coram The Honourable Mr.Justice B.RAJENDRAN W.P. No.15100 of 2014 and M.P.No.1 of 2014 M/s.Sri Krishna & Co., rep.by Proprietor 42/41, M.Upputhottam II Street Annur, Coimbatore 641 653. .. Petitioner vs. The Assistant Commissioner (CT) Avinashi Circle Avinashi 641 654. .. Respondent Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorari to call for the records of the respondent in CST No.970516/10-11 and to quash the order dated 17.03.2014 passed therein. For Petitioner : Mr.B.Raveendran For Respondent : Mr.Kanmani Annamalai Additional Government Pleader (Tax) O R D E R
The prayer in the writ petition is to quash the order dated 17.03.2014 passed by the respondent in CST No.970516/10-11.
2. The case of the petitioner is that the respondent has proposed to treat the local sales effected by the petitioner as an inter-state sale on the ground that the sale bills for local sales were not furnished. According to the petitioner, no proof or whatsoever is available with the respondent to prove even an inter-state movement of goods from the petitioner's place at Avinashi to another State. In such circumstances, based on the inter-state sales invoices raised on a single day, the respondent has presumed that the petitioner had effected inter state sales everyday and wrongly assessed the inter-state sales for a period of six months, which is prohibited under the law.
3. Learned counsel for the petitioner would submit that the Assessing Officer himself had given a finding that the business of the petitioner has been closed, even then, determining the tax due under Central Sales Tax Act, 1956 to the tune of Rs.1,68,80,362/-, especially taking into consideration the one day sale, is absolutely incorrect. He would further submit that the Division Bench judgment of this Court reported in [2006] 147 STC 111 (Mad) [State of Tamil Nadu vs. New Kamaliya Hotel] will squarely apply to the facts and circumstances of the present case.
4. Learned Additional Government Pleader appearing on behalf of the respondent would fairly admit that the authority cannot unilaterally and without any basis fix the sales for six months based on the one day sale. However, he would submit that the petitioner has not even chose to give its reply to the show cause notice issued.
5. Heard both sides and perused the records.
6. The Division Bench of this Court in the judgment reported in [2006] 147 STC 111 (Mad) has held as follows:
"4. We heard the counsel. The assessing officer made estimates based on the one day sales. Normally, sales may differ from auspicious day and inauspicious day. So, taking the one day average for estimation is not a scientific method sanctioned by law. It is only a crude method which has no substance. At least in order to arrive at one day sales, either the assessing authority or the Enforcement Wing Officers should have made surveys every month taking into consideration the normal day, auspicious day and inauspicious day. Both the authorities below also found that there was no omission established by the Revenue. Mere one day sales could not be attributed to estimate the whole year without considering the festival season, rainy season and other natural calamities. It is also seen that the first appellate authority as well as the second appellate authority had considered all the relevant materials and came to the correct conclusion. The assessing officer had only relied on the one day sale for making estimation. The Tribunal is correct in holding that the assessing officer was wrong in estimating the additions which was solely based on one day sales. We are of the firm view that the assessing officer cannot make estimate based on one day sales.
5. In view of the foregoing reasons, we find no error or infirmity in the order of the Tribunal and hence no question of law arises for consideration of this Court. Accordingly, the tax case is dismissed. No costs."
7. Taking into consideration the facts and circumstances of the case and in view of the aforesaid judgment, the impugned order is set aside and the writ petition is allowed. The petitioner is directed to file its objection to the show cause notice within 15 days from the date of receipt of a copy of this order, if not already filed and the respondent, on receipt of such objection, shall give an opportunity of personal hearing to the petitioner and pass appropriate orders on merits and in accordance with law and in the light of the aforesaid judgment. No costs. Consequently, the connected miscellaneous petition is closed.
12.06.2014 Index :Yes/No Internet :Yes/No vj2 To The Assistant Commissioner (CT) Avinashi Circle Avinashi 641 654.
B.RAJENDRAN,J vj2 W.P.No.15100 of 2014 12.06.2014