AKSHAYA ENTERPRISES Vs. STATE OF KERALA

JUDGEMENT

(1.) The tax revision cases arise from the common order of the Sales Tax Appellate Tribunal, disposing of two appeals, one filed by the assessee and the other by the State, for the same assessment year 1991:92. The assessee was a retail dealer in arrack during the relevant year. Three inspections were held. On all the inspections, petitioner/assessee did not have the proper accounts and, therefore, non-maintenance of accounts was accepted and compounding fee paid on three occasions. In the assessment also, petitioner did not produce any purchase bills and sales bills, but he had only stock register. However, on analysis, the sales turnover accounted for the quantity of arrack purchased and accounted by petitioner, the sale price worked out at Rs. 146 per litre while the prevailing market price on enquiry was found to be Rs. 70 per litre. The quantity purchased by petitioner was only 26975 litres. Since the sale price accounted by petitioner works out about double the market price of the product, namely arrack, the assessing officer assumed that the petitioner was engaged in unaccounted purchase of arrack from unknown sources and was selling it. The assessment was accordingly completed by estimating the quantity of liquor that could have been purchased and sold without accounting the same. The first appellate authority, however, modified the assessment by sustaining addition of Rs. 1 lakh. The Tribunal, on departmental appeal, restored the assessment by allowing the departmental appeal and by dismissing the assessee's appeal.

(2.) Even though the learned Counsel appearing for the petitioner firstly canvassed for acceptance of the accounts, we feel the claim is absurd because the dealer admittedly did not maintain sales bills and purchase bills and in the course of one year, he paid compounding fees three times for non- maintenance of books of account. Even the first appellate authority who allowed the petitioner's appeal, did not find any credibility for the petitioner's accounts and all the three authorities did not accept petitioner's claim for reliability of accounts. In the circumstances, we reject this contention.

(3.) The next ground raised by the counsel for the petitioner is against esti-mation of first sales turnover of arrack merely because the petitioner accounted the sale price higher than the market price. The counsel contended that the petitioner's sale price should be accepted as the market price of the commodity. This would indirectly mean that the petitioner's accounts should be accepted. Having upheld the rejection of petitioner's books of account, we cannot accept petitioner's theory that the sale value accounted is the price realised for the purchased quantity accounted. It is seen from the Tribunal's order that the purchase price was Rs. 26 and going by the purchase quantity accounted by petitioner, the sale price should be Rs. 146 per litre whereas the Intelligence Wing Officers of the Sales Tax Department and the assessing officer on local enquiry found that the average retail price of arrack during the year was Rs. 70 per litre. Market price is the price which is prevailing in the market. We do not think any peculiar circumstance would have existed where the customers will go to the petitioner's arrack shop to consume arrack by paying double the market price. Petitioner has not only not produced any data regarding market price before any of the lower authorities and even in this proceeding, petitioner has not been able to produce any evidence regarding prevailing market price of arrack to consider whether the market rate adopted by the Department is low. Since the market price determined is based on enquiry by Intelligence Department and the assessing officer, we see no reason to deviate from the same. Therefore, the Tribunal's decision to accept the market price determined by the assessing officer based on enquiry, is upheld.