MOHAMMED HAJI M Vs. STATE OF KERALA

JUDGEMENT

(1.) Revision petitioner is an assessee engaged in the business of Cement dealership and having registration under the Kerala Value Added Tax Act(hereinafter referred to as the Act). For the year 2007-08 the dealer had filed returns and on finding that certain purchases of Cement from the Malabar Cements has not been reflected in the returns; the books of accounts were called for and examined. On scrutiny of the books of accounts it was revealed that cement purchases from April to August 2007 totaling about Rs.3,39,015.00 was suppressed from the books of accounts. In the circumstances, notice was issued contemplating best judgment assessment and after considering the objections of the dealer the proposals in the notice were confirmed. Assessment was completed making an addition of unaccounted purchase with Gross Profit estimate at the rate of 2% and a further addition of 10% of the total turnover, including that returned and unaccounted for probable omissions and suppressions.

(2.) THE dealer filed appeal against Annexure-A order which was disposed of by Annexure B. Though the rejection of Books of accounts as also additions were confirmed, the first appellate authority thought it fit to direct the Assessing Officer to grant input tax credit with respect to the suppressed purchases since they were from a registered dealer namely M/s. Malabar Cements India Limited; a Government of Kerala undertaking. The State aggrieved by the grant of input tax credit was before the Tribunal and the Tribunal by AnnexureC order reversed the order of the first appellate authority and restored the order of the assessing officer dis-entitling the revision petitioner to claim and avail of input tax credit on the suppressed turn over. The above decision was anchored on the ratio of two decisions of this Court as also the provisions of the Kerala Value Added Tax Act.

(3.) THE revision petitioner does not dispute the actual suppression. The plea of the revision petitioner is to the effect that the omission to account the said transaction was due to a wrong advice that, if the delivery is made directly to the ultimate consumer; no further tax has to be paid by the dealer and hence there was no reason why the same should be accounted. The said contention would go against the very concept of Value Added Tax and is only to be rejected. Further while considering the contention put forward by the dealer, the Assessing Officer has categorically found that the very same defect occurred in the previous year and was pointed out by the audit officer and the assessment was completed in the said year also resorting to best judgment. The further contention is to the effect that since the purchases were made from a Government Company, tax was suffered and this entitles the revision petitioner to claim input tax credit. The Act does not provide for any credit of input tax automatically on the purchases being proved to be made from a Government Company.