M/S. NATIONAL ORGANIC CHEMICAL INDUSTRIES LTD., REPRESENTED BY ITS REGIONAL SALES MANAGER Vs. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (ASST.) IV, DEPARTMENT OF COMMERCIAL TAXES

JUDGEMENT

(1.) THE challenge in the original petition is against Ext. P15 order passed by the respondent in proceedings initiated under Section 19 of the Kerala General Sales Tax Act. The assessment year in question is 1987 -1988 and the assessment was initially completed vide Ext. P1 order. Thereafter, vide Ext. P2 notice issued under Section 19 of the Kerala General Sales Tax Act, it was proposed to re -assess the petitioner on a total turnover of Rs. 1,10,03,565/ - and taxable turnover of Rs. 30,32,540/ -. This was done pursuant to an observation that on a verification of accounts of two purchasers namely M/s. Bharat Rubbers, Kalamassery and M/s. Cochin Rubbers, Kalamassery, it was noticed that there were certain purchases recorded in their books of accounts which did not reflect in the sales recorded by the assessee in its books of account. Although the petitioner furnished a detailed reply to the said notice vide Ext. P3, vide Ext. P4 order, the respondent confirmed the proposal in Ext. P2 notice. It would appear that the petitioner carried the matter in appeal before the appellate authority under the Kerala General Sales Tax Act, who set aside Ext. P4 order after finding that there was non -compliance with the requirements of natural justice. He then remanded the matter to the respondent for fresh consideration. The respondent thereafter issued a fresh notice which is produced Ext. P6 in the original petition. Pursuant to a reply furnished by the petitioner to that notice Ext. P8 assessment order was passed whereby the respondent once again confirmed the findings in Ext. P4 order initially passed by him. This led the petitioner to, once again, prefer an appeal before the appellate authority who, yet again, vide Ext. P10 order, remanded the matter to the assessing authority for fresh consideration of the matter after verifying the books of accounts of the purchasers and furnishing copies of the Purchase Invoices, if the same were available, to the petitioner, before proceeding to pass orders in the matter.

(2.) PURSUANT to Ext. P10 order of the appellate authority, the petitioner approached the respondent with a request for furnishing copies of the invoices which were relied upon by the respondent for rejecting the books of accounts of the petitioner. It would appear that the respondent was not able to furnish copies of these invoices to the petitioner and hence after issuing Ext. P13 notice, and considering the reply furnished by the petitioner, he proceeded to pass Ext. P15 order confirming the proposals in the original notice to the extent of making an addition of Rs. 4,88,544/ - to the turnover reported by the petitioner and levying tax on the differential turnover. In Ext. P15 order, it is noticed that the respondent assessing authority accepted the plea of the petitioner with regard to three of the invoices that were originally objected to in the notice issued to the petitioner. The addition was therefore confirmed based on the remaining two invoices, copies of both of which could not be furnished to the petitioner despite it making a specific request for the same.

(3.) AT the very outset, it must be noticed that this is the third round of litigation in respect of the KGST assessment of the petitioner for the year 1987 -88. While in the first two rounds the revised orders of assessment passed by the respondent were set aside by the appellate authority and the matter remanded to the respondent for conducting a de novo adjudication after giving the assessee an opportunity of commenting upon the entries in the purchaser's books of accounts with regard to sales that were alleged to have taken place, the respondent was not able to comply with the said direction of the appellate authority. No doubt, this was on account of the fact that the purchasers in question were not able to furnish copies of the purchase invoices on the strength of which they allegedly made the purchases and the corresponding entries in their Purchase Register. At this belated stage of the proceedings, it is apparent that such evidence cannot now be produced by the respondent for the purposes of the assessment proceedings. The respondent also admits that it has not been able to get the said documents despite its best efforts to get the same pursuant to the directions of the appellate authority.