ALUKKAS JEWELLERY Vs. STATE OF KERALA

JUDGEMENT

(1.) The question raised in the connected Sales Tax Revision Cases, one filed by the assessee and the other filed by the State, is whether the Deputy Commissioner of Sales Tax has jurisdiction under S.35(2A) of the Kerala General Sales Tax, hereinafter called the 'KGST Act', to order reopening and revision of a best judgment assessment based on subsequent information that pursuant to raid by income tax department the assessee conceded unaccounted sales and business income based on which revised income tax assessment was concluded by orders of Settlement Commission. Revisions happened to be filed on the same issue by both sides because of the conflicting views taken by two Benches of the Sales Tax Appellate Tribunal which heard the cases pertaining to two assessment years. A Division Bench of this Court, which heard the cases, felt that the order of the Tribunal in favour of the assessee for one year is based on the decision of this Court which was rendered without referring to earlier decisions expressing contrary view. Therefore the Division Bench referred the matter to Full Bench and hence these cases are before us. We have heard Special Government Pleader appearing for the State and counsel appearing for the assessee.

(2.) Since facts are similar, it is enough we refer to the facts of one case and therefore we refer to the facts which led to STRV No. 133 of 2006 filed by the assessee which pertains to the assessment year 1994-95. The assessee is engaged in jewellery business. In the accounts produced in support of returns the assessee though conceded substantial sales and gross profit, the result was net loss of Rs.4,66,906/-. However, the total loss disclosed before the Income tax Department was Rs.1,02,069/-. In the course of regular assessment, the assessing officer noticed that having regard to the stock in trade, and business name of the assessee, the sales turnover returned did not appear to be correct and further inspection of business places by the Intelligence Squad on 01/09/1994 revealed stock difference. Consequently assessment was completed by making addition of 25% to the declared turnover. Though the addition was sustained in first appeal, the Tribunal on second appeal cancelled the addition to the turnover. Even though original assessment got confirmed through Tribunal's order, the Deputy Commissioner collected information pertaining to income tax assessment of the assessee, finalised through orders of the Settlement Commission, wherein the assessee conceded additional income of Rs.15 lakhs in jewellery business. The concession made by the assessee and recorded in the order of the Settlement Commission based on which the Deputy Commissioner initiated proceeding under S.35(2A) of the KGST Act, are in the following words:

(3.) Based on the assessee's admission accepted in the Settlement Commission's order that the assessee had practised unaccounted purchases and sales and earned profit in jewellery business, the Deputy Commissioner issued orders under S.35(2A) of the KGST Act for revision of assessment originally completed and finalised in appeals. This was resisted by the assessee on the ground that since the very same issue, namely, estimation and addition to the turnover was subject matter of appeal, the same cannot be the basis for revision of assessment under S.35(2)(b) read with S.35(2A) of the KGST Act. Even though the assessee's contention was rejected by the Tribunal holding that the basis of reopening of assessment under S.35(2A) is new information received by the Deputy Commissioner, which was not subject matter of appeal, another Bench of the Tribunal allowed the assessee's case following earlier order of the Tribunal in the assessee's own case, which again was based on decision of this Court. The question, therefore to be considered, is whether based on facts above stated, the Deputy Commissioner was justified in ordering revision of assessment once completed and got finalised in one round of appeals. In order to appreciate the contention, we have to refer to the relevant Section which is extracted hereinbelow: