V M PAUL Vs. STATE OF KERALA

JUDGEMENT

(1.) THESE are the two revision cases under section 41 of the Kerala General Sales Tax Act, 1963 and they relate to the assessment proceedings for the years 1990-91 and 1991-92 respectively. We will refer to the factual matrix of T. R. C. No. 193 of 1994 in the first instance. The petitioner runs a jewellery shop at Trichur High Road and thus he is on the file of the Sales Tax Officer, First Circle, Trichur. He declared a total taxable turnover of Rs. 4,27,683. 50. The accounts were scrutinised and they were proposed to be rejected on the ground of difference in stock as a result of surprise inspection by the Intelligence Officer on January 7, 1991. This difference could be seen as follows : " 1. New gold ornaments - excess. . . 79 gm. 2 Old gold - shortage. . . 200 ml. 3 Silver ornaments - shortage. . . 2. 150 gm. " It was further observed that the declared turnover of Rs. 4,27,683. 50 had no parity with the running stock, Rs. 7,02,283. 74. It is found that correct method to ascertain the running stock is followed by totalling the opening stock and the closing stock and striking the average. The assessment was proposed to be completed at four times the running stock on a turnover of Rs. 28,09,130. The explanations of the assessee were not accepted and by the order dated October 27, 1992 on a turnover of Rs. 28,09,130 further payment of tax of Rs. 1,43,538 and surcharge of Rs. 10,317 was fixed by the order annexure I.

(2.) THE factual matrix of T. R. C. No. 194 of 1994 shows declaration of total taxable turnover of Rs. 4,06,246. 29. THE surprise inspection was on February 8, 1992, after scrutiny of the accounts and finding difficulty to accept them. THE stock difference noted as a result of the surprise inspection is as follows : " 1. New gold ornaments - shortage. . . 77. 960 grams. 2. Old gold - excess. . . 27. 100 grams. 3. Silver ornaments - shortage. . . 197. 600 grams. " It was also equally found that the turnover declared has no parity with the running stock of Rs. 6,01,758. 45. THErefore, following the accepted method, running stock was estimated proposing it to be contemplated at four times the running stock on a turnover of Rs. 38,94,540. It is found that this estimation is inclusive of the purchase turnover from August 1, 1991 as the scheme of tax on jewellery was modified from the said date. It is also recorded that during the assessment year the jewellery sale was taxable at 5 per cent from April 1, 1991 up to July 31, 1991 and at 3 per cent from August 1, 1991 to March 31, 1992. It is also found that exemption under section 5a for old jewellery used in manufacture came to be revoked and it became taxable at 1 per cent. THE assessee's explanations were considered and rejected and the assessment was finalised by the order dated October 27, 1992 on the basis of a turnover of Rs. 38,94,540, on the basis of which further payment of tax of Rs. 1,09,606 and surcharge of Rs. 7,533 was demanded.