K H CHAYABBA Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) This revision petition is directed against the order the Appellate Tribunal, Bangalore, dated June 7, 1979 made in S.T.A. No. 333 of 1979.

(2.) The petitioner is a dealer registered under the Karnataka Sales Tax Act, 1957. He is the proprietor of an establishment engaged in the manufacture of wooden and steel furniture. For the year 1973-74 he declared the total and taxable turnover at Rs. 48,628 and Rs. 37,150. In the course of the assessment proceedings the Assistant Commercial Tax Officer, Chickmagalur, inspected the business premises of the petitioner and seized certain documents. He discovered that the petitioner has suppressed the sales turnover of Rs. 69,904 in respect of the furniture distributed under a gift scheme. He also found that the sale transaction to the extent of Rs. 34,983 was suppressed by the petitioner. Relying upon this material, the assessing authority completed the assessment under section 12(3) of the Act by determining the total and taxable turnover at Rs. 1,58,102 and 1,66,632 respectively with the levy of tax of Rs. 14,398 and imposition of penalty of Rs. 13,000 under section 12(4) of the Act. Being aggrieved by the assessment and penalty, the petitioner appealed to the Deputy Commissioner of Commercial Taxes (Appeals), Mysore Division. The Deputy Commissioner allowed the appeal, set aside the assessment order and remanded the case with a direction to the assessing authority to re-do the assessment after giving an opportunity to the petitioner to substantiate his contention regarding the non-liability to tax the turnover under the gift scheme. Pursuant to the order of remand, the assessing authority started reassessment proceedings and in doing so he allowed deduction in respect of the sales of steel furniture as second dealer and fixed the taxable turnover at Rs. 1,07,063 levying the tax of Rs. 13,023 with penalty of Rs. 9,333. The petitioner again took up the matter in appeal before the Deputy Commissioner. He raised a specific contention that the distribution of the steel furniture under the benefit scheme could not be considered as sales and the amounts realised thereunder could not therefore be regarded as turnover eligible to tax. He contended that the goods were delivered as per the conditions of the benefit scheme against payments of instalments depending on luck or chance and there was no agreement for sale between the petitioner and the members of the benefit scheme. The Deputy Commissioner found some substance in that contention and he allowed the appeal in part. Being aggrieved by the order of the Deputy Commissioner, the petitioner preferred an appeal to the Appellate Tribunal. The Tribunal while dismissing the appeals, has however reduced the penalty to Rs. 6,000.

(3.) In this revision petition three contentions were urged by Sri S. P. Bhat, learned counsel appearing for the petitioners, first, regarding the tax levied on the transactions under the gift scheme; second, on the turnover determined on the basis of the entries in the seized book and third, legality of the penalty imposed.