RAJU Vs. STATE OF KERALA

JUDGEMENT

(1.) THE same assessee is the revision-petitioner in both the revisions. THE respondent in both the cases is the Revenue. THE revisions are filed against the common order passed by the Sales Tax Appellate Tribunal, thiruvananthapuram dated 18-6-1991 in T. A. Nos. 529 and 671 of 1988. THE revisions as also the appeals before the Sales tax Appellate Tribunal relate to the assessment for the year 1986-87.

(2.) THE petitioner is an assessee under the Kerala General sales Tax Act. It is a dealer in arrack. During the relevant year, it had 12 shops (14 arrack shops and 8 sub-shops ). For the relevant year, the assessee conceded total exempted turnover of Rs. 39,17,799/- towards the second sale of arrack. THE assessing officer found the accounts incorrect and incomplete for six reasons stated in the order of assessment. THE important defects highlighted were that the accounts maintained in the sub-shops were not produced for scrutiny, that the vouchers for the expenditure incurred are not forthcoming, that no turnover of soda, soft drinks (Cola) and arishtam were conceded and that when the business place of the dealers at Paramattom, one of the shops, was inspected by the Intelligence wing of the department on 21-10-1986, stock variation and discrepancies were found out. THE assessee compounded the offence by paying Rs. 7,000/ -. It was noticed that the total turnover of arrack was in the sum of Rs. 39,17,799/ -. THE excess stock difference of 608 litres, found out on the surprise inspection on 21-10-1986 worked out to 17% of the book stock for the day; so the Sales tax Officer added for omission and suppression a sum of Rs. 6,66,025. 83, which represented 17% addition to the turnover returned. THEre was an addition of 2% on the estimated turnover relating to Soda, Cola and Arishtam, empty bottles for arishtam and caps coming under S. SA of the Act. THE total taxable turnover was arrived at rs. 7,65,300/- and the tax liability of Rs. 3,29,168/- and a surcharge of rs. 21,945/- was fixed.

(3.) ON the other hand, counsel for the Revenue submitted that admittedly on a surprise inspection of the business premises of the assessee at Paramattom on 21-10-1986 stock variation and other discrepancies were found out. The assessee did not produce the accounts of the various shops for scrutiny. The turnover on soda, soft drinks, and arishtam were not disclosed. These and other defects entailed rejection of accounts and warranted a best judgment assessment. The best judgment assessment made by the assessing authority is based on material. The material being the excess stock difference found on the inspection on 21-10-1986 which worked out to 17% of the book stocker day. The assessing authority was justified in adopting the same percentage for the whole year, for the Paramattom shop and for other shops, since it was probable that the assessee would have excess stock on other days and also in other shops. The Appellate Assistant Commissioner fixed the addition on a lump sum basis at Rs. 1,50,000/- arbitrarily. The Sales tax appellate Tribunal having found that the books of accounts are not acceptable was justified in restoring the order passed by the assessing authority, since the interference made by the Appellate Assistant Commissioner was unauthorised and unwarranted.