STATE OF KERALA Vs. VALIYAKULANGARA HARDWARES

JUDGEMENT

(1.) This tax revision case was preferred by the State of Kerala raising the following questions of law:

(2.) Assessee is a dealer in iron and steel. Assessee has returned a total turnover of Rs. 1,76,56,830 for the year 1990-91 claiming exemption for the entire turnover as second sales for which first point tax has already been suffered. Assessing authority after examining the accounts of the assessee for the relevant year had found that there was shortage of 664.750 kilograms of winding wires, which was detected during the shop inspection conducted on October 10, 1990. On the basis of the said finding, accounts were rejected and the assessment was completed by best judgment method. Assessing authority added Rs. 1,76,560 to the conceded turnover. While completing the assessment, turnover conceded by the assessee was given exemption and on the turnover added by the assessing authority no exemption was given on the ground that there was no evidence to show that the added turnover had suffered tax at the point of first sale within the State.

(3.) Dissatisfied with the assessment the assessee filed appeal before the Deputy Commissioner (Appeals) as STA No. 28/1992. Appellate authority sustained the addition but found that the addition made is to non-taxable turnover and therefore it was held that tax cannot be levied on the added turnover. On the above basis, appeal was disposed of by the appellate authority on March 12,1992. Aggrieved by the said order, State took up the matter in appeal before the Sales Tax Appellate Tribunal as T. A. No. 653 of 1992. Tribunal sustained the addition with the view that no tax can be collected in respect of the added turnover on the ground that the addition made also represents exempted turnover. Appeal was accordingly dismissed by order dated December 14, 2000. Aggrieved by the same this revision has been preferred.