HOTEL SURYA Vs. THE STATE OF KERALA

JUDGEMENT

(1.) This is a revision filed by the assessee challenging the orders passed under Section 45A of the Kerala General Sales Tax Act, 1963 (for short 'the Act') levying penalty on the basis of addition of gross profit at the rate of 80%. In the first appeal filed before the statutory authority, though the penalty was sustained, addition of gross profit at 80% was modified and reduced to 50% on the purchase price. In the further appeal filed by the assessee before the Tribunal, the Tribunal passed Annexure C order dismissing the appeal. It is aggrieved by these orders, this revision has been filed.

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

(3.) The assessee conducts a bar attached hotel at Iritty in Kannur District. The place of business was inspected by the Intelligence Officer, Thalassery on 19.08.2009. On inspection, the physical stock of goods found on actual counting and measurements were recorded. The accounts and other documents were called for for verification. However, the statement of accounts produced was not accepted as true and complete and one of the reasons stated is that no sale bill was seen issued from the place of incidence. It is also stated that day book, ledger, sale book etc., were not produced either at the time of inspection or at the time of verification of the books of accounts. On Verification of the statement of accounts, it was revealed that the gross profit reported was 41.32%. On verification of some of the bills recovered, it was disclosed that the average rate of gross profit was 80%. In such circumstances, after completing the procedural formalities, the Intelligence Officer added 80% towards the purchase price of the goods sold during the relevant period and on that basis the sales turnover was estimated. Accordingly, double the amount of turnover tax on the suppressed turnover of sales was imposed as penalty under Section 45A of the Act and the said proposal was confirmed by the impugned order. In appeal, the appellate authority reduced the gross profit to 50%. This was confirmed by the Tribunal also.