HALEEMA ZUBAIR Vs. STATE OF KERALA REP

JUDGEMENT

(1.) Petitioner is a dealer in ceramic tiles, who, during the accounting year 1998-99, accounted receipt of Rs.45,80,168/- towards service charges and commission received and claimed exemption, on the same on the ground that the same does not represent sales turn over of goods. The Assessing Officer in the course of assessment directed the petitioner to produce documentary evidence towards proof of nature of receipt claimed as commission and service charges. Even though the petitioner produced some letters of parties pertaining to the relevant year and subsequent year, petitioner could not prove the payments received from another concern M/s. Poseidon Food Company, which is also another arm of the petitioner. Since petitioner did not establish the nature of exemption, the Assessing Officer treated the same as sales turn over of the same company and levied tax. Petitioner filed first appeal and the appellate authority deleted the addition on the ground that the Assessing Officer did not establish the receipts as representing sales turn over of goods. However, on appeal by the State, the Tribunal restored the addition, as petitioner failed to establish the nature of receipt as not sales turn over before the Tribunal also.

(2.) We have heard learned Counsel for the petitioner and the Government Pleader appearing for the respondent.

(3.) Petitioner is admittedly dealing in ceramic products during the year and the petitioner accounted in addition to declared sales price, receipt of Rs.45,80,168/- from a sister concern M/s. Poseidon Food Company. Even though the petitioner put up a specific case that the receipt represents service charge* and commission for arranging buyers, testing and quality certification of marine products, petitioner has not produced any agreement with exporters or foreign buyers involved in the transaction or details or proof of any network such as office, staff, lab etc., for effectively carrying out the business. In the absence of any document, the Tribunal restored the addition after reversing the order of the first appellate authority. Even before us, petitioner has not produced any agreement or accounts giving the particulars of the receipts. Having regard to the amount involved, we are sure that the transaction would have passed through bank account and if any amount represents commission is received from foreign buyers, then the same would have been remitted through bank and we see no reason why the petitioner kept the department in dark about the financial transaction. In the absence of any proof, even at this stage, the only question to be considered is what is the consequence of an unexplained credit in a traders' account for the purpose of sales tax. We have to straightaway refer to Section 12 of the KGST Act, which reads as follows: