M/S. TNVR CAFE Vs. STATE OF KERALA

JUDGEMENT

(1.) The assesee, a vegetarian hotel dealing in cooked food as also sweets and savories, is concerned with the assessment made for the year 2011-12. Additions are made under various heads in Annexure-A assessment order passed on best judgment. The Assessing Officer found that there was a suppression detected on shop inspection which turnover was determined at Rs. 4,05,049/-. The assessee admitted the same and paid compounding fees. There was also noticed purchase of chairs in which bills, the PIN number was disclosed; which according to the Department was to avail concessional rate of tax. The purchase was also not accounted by the assessee and hence it was added to the turnover. There was also an addition made on the turnover, with GP added at 25%, coming to Rs. 25,19,768/-. Later this addition was revised by the AO and the sales turnover of cooked food was fixed on the basis of the suppression of purchase of LPG cylinders. Eventually, the AO on the basis of estimation that each cylinder would be utilised in cooking at least 500 meals determined the suppressed turnover at Rs. 5,85,000/-.

(2.) The assessment was challenged in appeal before the first appellate authority and before the Tribunal. There was also an issue raised as to permission for compounding which the Tribunal on examination of the records found no application having been filed. The estimation made on account of the purchase suppression of LPG cylinders was found to be excessive and the same was sent back for fresh consideration. The assessee is in revision with the following questions of law:-

(3.) With respect to the sale of chairs, we find that there was a detention of transport of chairs showing the PIN number in the invoices and there was also a penalty imposed of Rs. 10,000/- finding no possibility of tax evasion. In such circumstances, there is no question of the sales turnover being added on to the sales turnover of the assessee, who is carrying on a vegetarian hotel. There cannot be any assumption made of the assessee having sold the chairs. Nor is the allegation of concessional rate having been availed in the inter-state purchase sustainable, since the assessee was registered under the Central Sales Tax Act.