ABDUL RASHEED Vs. STATE OF KERALA

JUDGEMENT

(1.) THIS Tax Revision Case has been filed by a registered dealer under S. 41 of the Kerala General Sales Tax Act, 1963 (hereinafter referred to as 'the Act' ). For the assessment year 1985-86 the petitioner who is a dealer in coconuts, filed return in form 8 declaring the total and taxable turnover of Rs. 18,16, 948. 60 and Rs. 9,69,965. 60 respectively. In support of the said return the accounts books were produced before the assessing authority. After scrutiny of the accounts, the assessing authority noticed various defects in the accounts and therefore found them incorrect and incomplete. In view of this reason, the assessing authority issued a notice under s. 17 (3) of the Act proposing to reject the accounts and to complete the assessment on best of judgment. Though the assessee was allowed time to file objections he did not file any objections against the proposal contained in the notice. Consequently, the assessing authority completed the assessment for the aforesaid year as proposed by it in the pre-assessment notice. While completing the assessment the officer has added a total turnover of Rs. 4,20,135 towards alleged omissions and suppressions which includes an estimated purchase turnover of Rs. 2,00,000.

(2.) AS against the aforesaid assessment, the assessee filed an appeal before the Appellate ASsistant Commissioner as STA No. (Apy)737/88. The First Appellate Authority by the order dated 11th August 1988 upheld the rejection of accounts. Further it deleted the addition of Rs. 2,00,000 made towards the purchase turnover. However, the remaining addition of rs. 2,20,135 made by the assessing authority was confirmed. Both the assessee and Revenue being dissatisfied with the said order filed appeals before the kerala Sales Tax Appellate Tribunal. The Tribunal also confirmed the rejection of accounts. However, the deletion of turnover of Rs. 2,00,000 made by the first Appellate Authority was set aside by the Tribunal and thus allowed the state appeal. While doing so, the Tribunal found the additions made by the assessing authority are justified in view of the grievous nature of the defects noticed in the accounts. Accordingly, the Tribunal set aside the order of the appellate ASsistant Commissioner and restored the order of assessment passed by the assessing authority. The assessee being aggrieved by the order of the tribunal filed this Tax Revision Case before this court.

(3.) S. 17 (3) of the Act is as follows: (3) If no return is submitted by the dealer under sub-section (1) within the prescribed period, or if the return submitted by him appears to the assessing authority to be incorrect or incomplete, the assessing authority shall, after making such enquiry as it may consider necessary and after taking into account all relevant materials gathered by it, assess the dealer to the best of its judgment: Provided that before taking action under this sub-section the dealer shall be given a reasonable opportunity of being heard and, where a return has been submitted to prove the correctness or completeness of such return. Issue of a pre-assessment notice is sine qua non in the process of passing an assessment order under best of judgment under the above provision. It has a definite purpose to perform. The receipt of pre-assessment notice by the assessee is the first available opportunity for him to file objection against the proposal to complete the assessment on best of judgment and to explain the defects pointed out in the accounts. Therefore, when the assessee has received this notice it is for him to file objections if the proposal is against him or to request for time to file the objection if there is any reason. In case the assessee after the receipt of the notice keeps silent by not filing the objection or not requesting further time in that behalf, the natural presumption is that assessee has no grievance against the proposal contained in the notice.