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Showing contexts for: kvat act in Sri.Ahamed Kabeer vs State Of Kerala on 22 October, 2012Matching Fragments
SHAFFIQUE, J This revision is filed by the assessee against the order dated 22/10/2012 in T.A (Vat) No.398/2012 of the Kerala Value Added Tax Appellate Tribunal, Ernakulam. The issue relates to the assessment year 2005-2006.
2. The petitioner is a dealer in coconut and arecanut. According to him, during the period 2005-2006, he purchased arecanut from unregistered dealers under Section 6(2) of the Kerala Value Added Tax Act, (hereinafter referred to as KVAT Act). Produce was sent to agents outside the State of Kerala for consignment sales under Section 6A of the Central Sales Tax Act. During the return period August 2005 and December 2005, when the arecanuts were being transported from Kerala to Karnataka two offences were detected and security deposits were collected from the petitioner under Section 47(2) of the KVAT Act. The security deposits were subsequently converted to penalty under Section 47(6) of the Act. Annexures A and B are the penalty orders. According to the petitioner, since he has no local sales of arecanut within the State he has no obligation to pay tax under the KVAT Act.
3. Since penalty was imposed on him, his monthly returns for October 2005 to March 2006 were rejected and the assessing officer resorted to best judgment assessments under Section 24 of the KVAT Act for the said months. The assessing officer added two times of purchase turn over of arecanuts as taxable under Section 6(2) and two times of the value of inter State stock transfer as turn over under Section 6(1) of the KVAT Act. Annexure C is the common assessment order. According to the petitioner, the return under the CST Act for the year 2005-06 was accepted by the Assessing Authority and Annexure D is the said assessment order. Challenging the orders passed by the Assessing Officer under the KVAT Act, the petitioner filed appeal before the Deputy Commissioner (Appeals) and the order was modified by reducing the addition to equal of the purchase turnover under Section 6(2) of the KVAT Act and the value of stock transfer for the purpose of assessment under Section 6(1) of the KVAT Act, 2003. Assessee was allowed special rebate on the turn over added under Section 6(2) of the KVAT Act.
4. The assessee preferred a further appeal before the Tribunal which came to be dismissed, against which this revision is filed.
5. The Tribunal held that the assessee has not raised a contention before the lower authorities that the assessing authority is not legally justified in estimating turnover suppression for local sales under the KVAT Act on the basis of the offence detected on inter state movement under the CST Act.
6. According to the petitioner, Tribunal committed serious error of law in rejecting the returns filed by the assessee under the KVAT Act for the offence committed under the CST Act. Specific reference is made to Rule 39(5)(i) and (iii) of the KVAT Rules 2005 in order to contend that the authorities below did not consider the said provision while upholding the order passed by the Assessing Officer. The revision petitioner has raised the following questions of law.
18. Another contention urged by the revision petitioner is regarding the assessment made under Section 24 of the KVAT Act, when the omission or suppression is detected only with reference to transactions under CST Act. Apparently this is the issue which ought to have been considered by the Tribunal. But the Tribunal proceeded on the basis that the assessee was in the habit of transporting goods much more than the quantity declared in the transporting documents and he had undervalued the goods. Hence assessment under Section 24 of the KVAT Act was sustainable. This, according to us, is a question to be considered taking into account the overall factual situation in the case. According to the assessee, he has no local sales. No local sales is detected by the Intelligence Officer. All the goods were transported through check posts and twice it was detected that the quantity transported was in excess of the quantity specified in the delivery note. In so far as the assessee had transported his goods only through check post, one cannot assume that at all point of time he had transported goods much more than the quantity declared. It is relevant to note that the first appellate authority found that considering the suppression detected, the addition made did not have a reasonable nexus to the same. Therefore when the authorities under the KVAT Act proceeds on the basis that despite the suppression being detected only twice, taking into consideration the manner in which goods were being transported, the assessment could be made under Section 24 of the KVAT Act cannot be found to be unreasonable which requires interference.