STATE OF KERALA Vs. JOEMON RAJAN

JUDGEMENT

(1.) Both these revisions by the State raise a common question of law, though the facts slightly differ. The respondents in both the revisions are Metal Crusher Units, in whose premises an inspection was conducted and turnover estimated on the basis of power consumption.

(2.) In O.T Revision No.124/2014 the Intelligence Officer inspected the place of business of the respondent assessee and called for the books of accounts. The assessee sought adjournment and though it was granted, eventually no books of accounts were produced. The Intelligence Officer, even as per the order at Annexure A "proposed to estimate the sales turnover for the year 2007-08 on the basis of the actual power consumption of the Crusher unit during the year 2007-08 as obtained from the Assistant Engineer, KSEB, Electrical Section, Thuravoor"(sic). The estimation was made on the basis of the details of the electricity consumed and taxable turnover determined; by estimating the turnover probable on consumption of the units of power metered. In first appeal, the First Appellate Authority deleted the estimation made finding that penalty has been imposed merely on technical reason of non-production of books of accounts. A penalty of Rs. 10,000.00 was imposed which was confirmed by the Tribunal. The State is in revision from the above order.

(3.) In O.T. Revision No. 206/2014 the Intelligence Officer inspected the premises of the respondent assessee on 22.10.2007. The business carried on in the premises was not registered and hence an enquiry was made as to the proprietor of the Unit. Based on the information supplied by the employees, notice was issued to one Sulaiman. The said Sulaiman appeared before the Assessing Officer and filed a reply stating that he had not done any business during the year 2007-08. According to him, the business was conducted by M.K. Marakkar. The Intelligence Officer carried out enquiries on his own and found that the Panchayat licence was issued in the name of M.K. Marakkar, the respondent herein. A notice was hence issued and again estimating the turnover on the basis of the power consumption, taxable turnover was determined for the year 2007-08. The First Appellate Authority set aside the penalty, finding that the Intelligence Officer had not verified whatever books produced by the assessee in a proper manner. An appeal was filed in which the Tribunal agreed with the finding of the First Appellate Authority that there was no proper verification of the books of accounts and also found that there could be no estimation under Sec. 67 of the Kerala Value Added Tax Act, 2003 ( for brevity " the KVAT Act" only).