JANATHA TOURIST HOME Vs. STATE OF KERALA

JUDGEMENT

(1.) This is an appeal filed by the assessee against the order passed by the Kerala Value Added Tax Appellate Tribunal, Ernakulam in T.A. (VAT) No. 931 of 2011. The assessment relates to the year 2006 -2007. The petitioner runs a bar attached hotel at Muvattupuzha. Along with the same, he runs a restaurant as part of statutory requirement. In respect of the assessment year 2006 -07, the conceded sales turnover in cooked food and beverages was Rs. 14,20,328 and in respect of liquor sales, it was Rs. 2,52,51,460. The intelligence officer conducted an inspection in the premises of the petitioner on February 13, 2007. It was found that there is a purchase suppression of Rs. 22,960 with reference to soft drinks, snacks and provisions. No irregularity was found out regarding the purchase or sales of liquor. On receiving notice under Sec. 67 of the Kerala Value Added Tax Act ("the KVAT Act", for short), the assessee compounded the same by paying a compounding fee of Rs. 2,135. The assessing authority issued a further notice dated December 3, 2009 under Sec. 25(1) of the KVAT Act proposing to complete the escaped assessment, rejecting the return submitted by the assessee based on the inference drawn by the intelligence officer. The assessing authority, after considering the explanation offered by the assessee, completed the escaped assessment by making addition of 15 per cent of sales of Indian -made foreign liquor as sales turnover of cooked food and beverages and arrived at an amount of Rs. 37,87,720 and levied tax on the same.

(2.) The assessee filed an appeal before the Deputy Commissioner (Appeals), who reduced the addition from 15 per cent, to five per cent.

(3.) The Department preferred further appeal before the Tribunal, which resulted in the impugned order. The Tribunal found that the assessment made by the assessing officer was justified and reversed the findings of the first appellate authority and confirmed the order passed by the assessing officer.