KAMATH RESTAURANT Vs. ADDITIONAL COMMISSIONER

JUDGEMENT

(1.) THE appellant-dealer is covered by the Karnataka Sales Tax Act, 1957. It is engaged in the business of running restaurants and the above appeal refers to the assessment years 1994-95, 1995-96 and 1996-97. For the assessment year 1994-95, appellant declared a turnover of Rs. 1,51,25,180.99. THE Intelligence authority inspected the business premises of M/s. Kamath Restaurant, one of the restaurants run by the appellant on March 13, 1995. During the course of inspection, the Intelligence authority verified the books of account and pointed out that the appellant has not reported the actual turnover and threatened the appellant that he would initiate criminal prosecution against the appellant. THE Intelligence authority offered an opportunity of compounding the alleged offence of the appellant. THE appellant chose to pay the compounding fee though it did not admit any suppression of turnover. Cheques were issued to the Intelligence authority as payment of advance tax. THE assessing authority based on the intelligence report proposed to determine the turnover by adopting five times of the establishment expenses as the taxable turnover. On receipt of the said notice, a detailed reply was sent by the appellant. THE assessing authority, however, proceeded to complete the proceedings to the best of its judgment by adopting an amount of five times the establishment expenses as the taxable turnover.

(2.) FOR the assessment years 1995-96 and 1996-97, after verification of the books of account, the assessing authority issued proposition notices, proposing to reject the reported turnover on the ground that the assessee failed to issue the sale bills and that the purchase of coconut declared by the appellant is very meagre when compared to the volume of business. Reply was sent. The assessing authority completed the proceedings in terms of an order dated March 31, 1999 by adopting the best judgment assessment method of taking five times the establishment expenses as the taxable turnover.

(3.) HEARD the learned Counsel for the parties.