SAPTHAGIRI ENTERPRISES Vs. COMMISSIONER OF COMMERCIAL TAXES

JUDGEMENT

(1.) Finding that the petitioner has been guilty of suppression and after forming an opinion that the return of turnover filed by the petitioner in Form No. 4 of the year ending 31.3.1988 was incorrect and incomplete, the Assessing Authority issued a proposition notice to the petitioner in terms of Sections 12(3), 12(4) and 12-B(2) of the Karnataka Sales Tax Act, 1957 (hereinafter called 'the Act'), calling upon the petitioner to show cause against the proposed Best Judgment Assessment. Petitioner was further called upon to adduce evidence if any, failing which it was to be presumed that the assessee had no objection to the proposed assessment. After considering the reply furnished and after affording the petitioner an opportunity of being heard, the assessing authority vide his Assessment Order dated 31.3.90 (Annex-C) ordered that the petitioner assessee shall be assessed to a tax of Rs. 1,10,87,708/ - for the period from 1.4.87 to 31.3.88 under Section 12(3) of the Act and further directed them to pay the penalty of Rs. 88,58,000/-which is about equal to taxes evaded. Not satisfied with the assessment made, the petitioner herein preferred an Appeal before the Deputy Commissioner of Commercial Taxes, who vide his order dated 25.3.1991 (Annex-D) set aside the assessment order and also the penalties imposed upon the petitioner and remitted the case to the assessing authority for redoing the same in the light of the findings and discussions made in his order, Not even satisfied with the order of the Appellate Authority, the petitioner herein preferred a further appeal before the Karnataka Sales Tax Appellate Tribunal. The State also submitted their cross-objections. The Tribunal disposed of the Appeal and the cross-objections vide a detailed order dated 20th May, 1992 (Annexure-F). The appeal was partly allowed. The cross-objections of the State were also allowed. The order of the appellate authority remanding the case to the assessing authority was set aside. The assessment order with modifications to the turnover was restored. Penalty under Section 12(4) of the Act passed by the assessing authority was upheld with modification to the penalty amount. On a critical examination of the facts of the case, the Tribunal came to the conclusion that the tax suppressed in the case worked out to be Rs. 11,44,983/- on rectified spirit and Rs. 3,43,823/- on molasses, both totalling to Rs. 14,88,806/-. Considering the fact that the assessing authority had imposed a penalty of 1 1/2 times which was maximum, the Tribunal came to the conclusion that penalty to the extent of suppressed tax, that is, Rs. 14,88,806/should be imposed upon the petitioner under Section 12(4) of the Act.

(2.) Still feeling aggrieved with the orders of the Tribunal, the petitioner - assessee has filed this Revision Petition under Section 23 of the Act for adjudication of the following questions of law by this Court:

(3.) The impugned appellate order is stated to be contrary to the facts of the case and well settled principles of law. It is submitted by the Learned Counsel for petitioner that the Tribunal committed an error of law in passing the impugned appellate order by wrongly holding that while passing the assessment order, the assessing authority had supplied the entire extract of seized exhibits to the petitioner despite the fact that the assessing authority had failed to provide the entire extract of all the seized exhibits. The assessing authority was not justified to take into consideration several materials which were allegedly not made available to the petitioner before passing the order. It is contended that the Tribunal was not justified in holding that Exhibit III(b) constituted a material of absolute evidential value so as to be relied upon for the purposes of assessment and to quantify the turnovers on the basis of the said exhibit Even according to Exhibit III(b), it was not established that the petitioner had been guilty of suppression of the rectified spirit for the month of March 1988. It is contended that the factory was found to have been remained closed on four days in the month of March, 1988 and that the Tribunal was not justified in returning a finding to the contrary. It is contended that the Tribunal was not justified in holding that the assessing authority was correct in comparing Exhibit-III(b) with Exhibit-I. The determination of turnover is alleged to be based upon erroenous considerations. The Tribunal was not justified in confirming the levy of penalty under Section 12(4) of the Act. The Tribunal ought to have held that the addition as made by the assessing authority and levy of penalty thereto was totally untenable and unsupportable in law.