SANTHA JEWELLERY Vs. STATE OF KERALA

JUDGEMENT

(1.) THE revisions are connected matters. They are filed by the same assessee. The revision petitioner - assessee is a dealer under the Kerala General Sales Tax Act, 1963. The respondent is the Revenue. We are concerned with the assessment year 1985 -86. The assessee returned a turnover of Rs. 9,85,259.02. He claimed exemption therefor. The returns and the accounts were rejected by the assessing authority. The order of assessment is dated March 17, 1987. The assessing authority rejected the accounts and the returns for the reasons stated in the assessment order. When the place of business of the dealer was inspected by the Intelligence Squad on January 16, 1986, variations in the stock of new gold ornaments and old gold were noted. It was also found that no purchase of copper was accounted. The Intelligence Officer imposed a penalty of Rs. 2,000 for the irregularities and discrepancies in the accounts. It was reduced to Rs. 600 in revision. In view of the specific disparity in stock, after rejecting the accounts, the assessing authority added 10 per cent towards probable omissions and suppressions. In appeal, the Deputy Commissioner (Appeals), by his order dated March 14, 1988, upheld the rejection of accounts, but reduced the ad hoc addition to 5 per cent to the taxable turnover conceded. The assessee as well as the Revenue filed appeals from the aforesaid order of the Deputy Commissioner dated March 14, 1988 before the Sales Tax Appellate Tribunal, Thiruvananthapuram. The Tribunal disposed of the matter by a common order dated February 26, 1991. The Appellate Tribunal adverted to the stock discrepancies found out on inspection conducted on January 16, 1986 and the penalty levied for the irregular maintenance of accounts. It was held that the rejection of accounts was justified. Regarding the quantum of turnover to be estimated, the Appellate Tribunal held that the first appellate authority reduced the addition to 5 per cent on fallacious reasoning and the addition of 10 per cent to the returned turnover made by the assessing authority is justified and reasonable. In these revisions, the assessee assails the aforesaid common order of the Sales Tax Appellate Tribunal dated February 26, 1991. We heard counsel for the revision petitioner, Mr. V. Giri.

(2.) THERE was only a feeble argument against the rejection of accounts sustained by all the three authorities. It is conceded that the business place of the assessee was inspected on January 16, 1986 and stock discrepancies in new gold ornaments and old gold were found out. There was no purchase of copper during the year. The Appellate Tribunal noticed that the difference in stock is 18 gms. in new ornaments and 4,400 gms. in old gold ornaments and the difference is not negligible. A penalty was imposed for the irregularities found out during the inspection. On these premises, the Appellate Tribunal sustained the rejection of accounts. We are of the view that the question as to whether the accounts of a dealer are acceptable or not is largely a question of fact. As a final fact -finding authority, the Appellate Tribunal, for very valid reasons, sustained the rejection of accounts. The finding in that regard is concurrent. We see no error of law in the reasoning and conclusion of the Appellate Tribunal in affirming the rejection of accounts. The assessing authority made an ad hoc addition of 10 per cent to cover possible suppressions. Once the accounts of the dealer are rejected, the quantum of estimate to be made is largely a question of fact. In a best judgment assessment, the quantum to be added is largely left to the discretion of the assessing authority. In this case, the assessing authority added 10 per cent towards probable omissions and suppressions. The first appellate authority reduced it to 5 per cent. It was on the ground that the alleged stock variation on the day of inspection covers more than 9 1/2 months of the year of assessment. The Appellate Tribunal held that in the case of a jeweller, if the inspection is within the last quarter of the year, it cannot be held that the suppressions found out at the inspection is relating to the period up to the date of inspection. The reasoning of the first appellate authority to reduce the quantum of estimate was found to be erroneous. After considering the nature of the business and the quantum of stock disparity at the inspection and the locality of the business of the assessee, the Appellate Tribunal held that the 10 per cent addition made by the assessing authority is justified and reasonable. The Appellate Tribunal restored the quantum of addition made by the assessing authority for valid reasons. The reduction made by the first appellate authority was found to be without basis and erroneous. The quantum of addition to be made in a best judgment assessment is also largely a question of fact. As a final fact -finding authority, the Appellate Tribunal has restored the estimate made by the assessing authority. We find no error of law in the said conclusion. No other point was urged at the time of hearing.