NARAYANASWAMY NAIDU Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) These revision petitions are preferred by the appellant challenging the order passed by the Karnataka Appellate Tribunal at Bangalore, which has declined to entertain the appeals by affirming the order of the Appellate Authority. The material on record discloses that the petitioner is an individual engaged in the manufacture and sale of construction equipments like concrete mixers, vibrators, etc. On 1-12-2006 is premises was inspected. It was found that the petitioner has been collecting advances from customers and fabricating and supplying machinery/equipments to such customers on the strength of pro forma invoices. Regular tax invoices regularizing such pro forma invoices are issued only in respect of some transactions and the sale effected on the strength of other pro forma invoices are not at all reflected in the books of account. In the statement of the petitioner recorded on 1-12-2006, he has given the details of all the pro forma invoices issued from 1-4-2006 to 29-11-2006. The said statement discloses that he had issued 80 pro forma invoices and the total turnover covered was Rs. 84,09,325/-. However, the taxable turnover declared by him both under the Karnataka Value Added Tax Act, 2003 and Central Sales Tax Act, 1956 comes to only Rs. 49,82,480/-. No tenable explanation was put forth. Similar discrepancies were noticed for the tax periods August 2005, January 2006, February 2006 and March 2006. Therefore, he was issued with a notice for prosecution. The petitioner admitted the offences and compounded the same by paying Rs. 25,000/-. It is in this background, the Assessing Authority assessed the petitioner to tax in respect of the turnover, which was not disclosed in the accounts. Aggrieved by the said order, he preferred a statutory appeal. In appeal, wherever the petitioner was able to produce the sale invoices, deletion was made; wherever he was unable to produce such sale invoices, the order of the Assessing Authority was confirmed. Aggrieved by the said order, the assessee preferred an appeal to the Tribunal.

(2.) The Tribunal on a careful reconsideration of the entire material on record found no fault with the order passed by the Appellate Authority. Therefore, it dismissed all the appeals. Aggrieved by the said order, the assessee is before this Court.

(3.) The learned Counsel appearing for the petitioner vehemently contended that, the procedure followed by the petitioner was that, first he used to issue pro forma invoices giving roughly the amount of cost of equipments, which he supplies. Thereafter, the equipment is to be supplied and sale invoice is to be issued. If the customer does not place orders after taking pro forma invoice, no machinery is manufactured, no sale invoice is issued. The authorities have taken the value mentioned in the pro forma invoice but came to the conclusion that the assessee supplied machinery of that value in respect of all the pro forma invoices issued and therefore, she submits that, the order requires to be interfered with.