JANARDHANAN Vs. STO CALICUT

JUDGEMENT

(1.) Three question have been raised in this writ application. The petitioner was assessed to sales tax for the year 1962-1963 by Ext. P. 5 order. By that order, he has been directed to pay a sum of Rs. 294.74 as tax due under S.11(2) of the General Sales Tax Act, 1125. The assessment evidenced is a best judgment assessment and an addition of a turnover of Rs. 77,000 and odd (10 per cent of the turnover returned) was made by the Sales Tax Officer on the assumption that there has been suppressions of sales. Finally, the assessing authority rejected the contention of the petitioner that ghee is taxable at 2 per cent under S.3(2) of the General Sales Tax Act, 1125, and not at 5 per cent under item 39 of Schedule I to the Act which relates to S.3(1)(b) treating it as 'foodstuffs' sold in sealed containers.

(2.) Counsel on behalf of the petitioner has challenged the order. Ext. P. 5 in regard to the above three questions. The first of these has to be allowed in view of the decision of the Supreme Court in R. Abdul Quader and Co. v. Sales Tax Officer, 2nd Circle, Hyderabad ( AIR 1964 SC 922 ). I do so.

(3.) The reasons mentioned by the respondent for the addition of 10 percent towards probable omissions were that on an inspection of the petitioner's shop, only 13 tins of oil were actually found as against the book stock of 14 tins. It is also said that the assessee had purchased rice from Messrs. T. S. Packiriswami Pillai & Co., for Rs. 2,000 and odd. On these two grounds a sum of Rs. 77,000 and odd has been added towards probable omissions.' I may mention that the said Packiriswami Pillai is himself a dealer and that if he had actually sold the rice to the petitioner, it is he, if at all, who should be liable to the sales tax and not the petitioner, for rice is taxable on the first purchase point. The purchase of the rice therefore has no relevancy in determining whether the turnover returned by the petitioner is correct or not. The only discrepancy that has therefore been found is about the number of oil tins. There is no material from which the exact price of a tin of oil is seen. In any view of the matter, the addition of a turnover of Rs. 77,000/- and odd is quite arbitrary and capricious. I have had occasion to deal with this aspect at great length in the decision in M. Appukutty v. Sales Tax Officer, Kozhikode ( 1965 KLT 830 ). The addition of Rs. 77, 311/- is therefore unsustainable. I therefore direct that this sum will be deleted from the assessment order as well as the sum of Rs. 294.74 and that the tax payable by the petitioner will be recomputed.