VELIMPARAMBIL HARDWARES Vs. STATE OF KERALA

JUDGEMENT

(1.) The petitioner herein, a proprietary concern, is an assessee under the Kerala General Sales Tax Act. The assessee is engaged in the business of sale of paints, hardwares, etc. at Ettumanoor. We are concerned with the assessment year 1987-88. It is stated that the business was started only in January 1988 and so, the assessment covered only for a period of three months. The assessee filed the return in Form No.8 for the year and declared a total turnover of Rs.4,74,985/- and the taxable turnover as 'nil'. The turnover disclosed as per the accounts and the returns were found not acceptable by the Assessing Authority. Various defects were pointed out in the pre-assessment notice served on the assessee dated 23-12-1988. Amongst others, the Assessing Authority stated that the business place was inspected by the Sales Tax Inspector on 30-1-1988 and the inspection revealed variation in the stock in different items. There was also another inspection of the business place of the assessee by the Intelligence Squad on 11-3-1988. The physical verification of few items was ascertained and recorded in the S.I.R. prepared. The stock recorded, when verified with the accounts, disclosed discrepancies in various items. The assessee compounded the offence on payment of a compounding fee of Rs.2,750/-. The accounts and the returns were rejected. By the order of assessment dated 24-1-1989, the Assessing Authority fixed the total turnover at Rs.8,74,639.62 and the taxable turnover at Rs.4,14,316.06, rounded to Rs.4,14,320/-. The total tax was determined at Rs.40,376.80 and a surcharge of Rs.1,665.50 was levied.

(2.) The assessee carried the matter in appeal before the Appellate Assistant Commissioner of Agricultural Income Tax and Sales Tax, Kottayam. By order dated 3-4-1989, the Appellate Assistant Commissioner held that there is no evidence in the assessment records to prove that the correct stock position or otherwise has been verified by the Assessing Authority on the basis of the shop inspection reports dated 30-1-1988 and 11-3-1988. The Appellate Assistant Commissioner further stated that the statements filed before her at the time of hearing showed that there are no discrepancies or variations with regard to certain items and so, the assessee should be given one more opportunity to present the case before the Assessing Authority. The assessment order was set aside and a remit was ordered.

(3.) The Revenue took up the matter in appeal before the Sales Tax Appellate Tribunal, Additional Bench, Kottayam and assailed the order passed by the Appellate Assistant Commissioner. The Appellate Tribunal referred to the inspections made on 30-1-1988 and 11-3-1988 and held that there were variations in stock on both the occasions. It was further noticed that when proceedings were taken with regard to the variations and other discrepancies that appeared on the inspection day (11-3-1988), the assessee compounded the offence departmentally, by paying Rs.2750/- as compounding fee. The Appellate Tribunal observed that the difference in stock was originally admitted by the assessee himself and compounded and so, he is estopped from denying the admitted facts of difference of stock. In these circumstances, it was held that the assessee ' is not maintaining a true and correct account, that there is a pattern in the suppression, the Appellate Assistant Commissioner was not justified in setting aside the assessment order and since no material or other compelling factors were placed before the Appellate Assistant Commissioner to warrant an order of remit, the order of remit passed by the Appellate Assistant Commissioner was set aside by the Appellate Tribunal, by order dated 22-1-1991. The assessee has come up in revision.