DEPUTY COMMISSIONER OF SALES TAX LAW BOARD OF REVENUE TAXES ERNAKULAM Vs. HAJEE M K CHERIYA MAMOO AND BRORS

JUDGEMENT

(1.) THE Revenue is the revision-petitioner. THE assessee is a dealer in hill produce at Robinson Road, Kozhikode. He was originally assessed by order dated 30th March, 1975, for the assessment year 1971-72. On receipt of information that the turnover of the assessee's business had escaped assessment, a reassessment notice was issued to him. It was stated in the notice that information had been received that large quantities of goods had been purchased in Calicut in the name of Kissan Spices Traders ("kissan"), Mahe, whose telegraphic address was the same as that of the assessee in Calicut. THEse goods were sent from Calicut to various parties outside the State, all in the name of Kissan. Kissan had opened a bank account in the United Commercial Bank at Calicut (Account No. 542) originally with a sum of Rs. 501, but which subsequently accumulated to Rs. 3,58,412. 45. THE address of the Kissan given to the bank was the same as that of the assessee in Calicut. Kissan was owned by one K. Hamza who had been registered as a dealer at Mahe in Pondicherry. THE registration was obtained by him by furnishing a security in landed property situated at Chekkode in Mahe. That property has been in the possession of the managing partner of the assessee. An inspection of the premises of the assessee was conducted by the Central Intelligence Squad on 1st June, 1972. Certain documents were recovered, including a letter sent by Kissan stating that goods should be despatched by the assessee from Calicut in the name of Kissan. THEse facts had been put to the assessee to show cause why the turnover of the business supposedly conducted by K. Hamza should not be treated as that of the assessee and the assessee assessed thereon. In his reply to the notice, the assessee denied the allegations, and stated that they had no knowledge of a man called Hamza. THE assessee was not in a position to explain satisfactorily as to how Hamza came to be connected so closely in business with the assessee when the case of the assessee was that they had no knowledge of a man by that name. THEy could not explain how a letter from Hamza asking the assessee to despatch goods in the name of Kissan was seen in the files of the assessee. THEy had no explanation for the bank account opened by Hamza in the address of the assessee. THEy again had no explanation for the telegraphic address of the assessee being used by hamza.

(2.) THE assessing authority on the strength of all the evidence available to him added a sum of Rs. 3,94,029 to the turnover of the assessee and tax thereon was imposed. This finding was affirmed in appeal by the Appellate Assistant Commissioner, who referred to the fact that it had been found by the Sales Tax Appellate Tribunal by their judgment in T. A. No. 205 of 1970 dated 11th October, 1973, that Mahe is neither a producing centre nor a marketing centre for pepper and ginger, but the Tellicherry pepper dealers are duping the Government of Kerala by accounting their local purchase as purchased from Mahe by obtaining registration certificates in Mahe in the name of fictitious persons or benamis. This was a well-known fact which had been judicially noticed by the Tribunal in another proceeding, and that fact was also taken into account by the Appellate Assistant Commissioner for affirming the finding of the assessing authority. THE Tribunal by its earlier order dated 30th October, 1977, reversed the concurrent findings and allowed the assessee's appeal. That judgment was challenged by the Revenue in T. R. C. No. 28 of 1978. This Court found that the Tribunal had no evidence on the basis of which it could have reversed the concurrent findings of the authorities. This Court set aside the order of the Tribunal and remanded the case to it for fresh consideration on the basis of evidence on record.

(3.) WE have been taken through the order of the Tribunal very carefully by counsel on both sides. WE are convinced that there was no evidence what-soever on the basis of which the Tribunal could have justifiably and reasonably reversed the concurrent findings reached by the two authorities on cogent evidence. The Tribunal ignored the fact that the original stand of the assessee in reply to the show cause notice was that none of the partners had any knowledge of Hamza. The Tribunal relied upon the evidence of the partner that he had seen Hamza two months before he made a statement before the assessing authority. The tribunal failed to notice the inconsistency between these two positions. The Tribunal had no evidence to support the conclusion that all the sales effected by a person called Hamza, who used the assessee's address for opening a bank account, for despatching goods, and for other purposes of his business, was not a mere name-lender, but a real businessman. The Tribunal ignored the fact that even the very registration of Hamza as dealer was on the strength of security which was land in the possession of the managing partner of the assessee. The link between Hamza and the assessee was so close and intimate that without evidence it was not reasonable on the part of the Tribunal to have brushed aside the concurrent findings of the authorities. It was on clear and cogent evidence that the authorities came to the conclusion that even if Hamza existed, he was only a name-lender, the transactions in his name were the transactions of the assessee, and it was the assessee who could be credited with the turnover realised in the name of Hamza.