M A UNNERIKUTTY Vs. STATE OF KERALA

JUDGEMENT

(1.) This revision is against the order of the Sales Tax Appellate Tribunal allowing an appeal by the State and vacating the order of the Appellate Assistant Commissioner. By the order of the Tribunal the order of assessment was restored. The revision petitioner is an assessee under the Kerala General Sales Tax Act. In the assessment of the petitioner for the year 1969-70 an addition of 60 per cent was made to the turnover of copra crushed in the Prabhat Oil Mills as disclosed in the books of the assessee and sales of oil and cake resulting from the crushing of the said copra was also taken into account in assessing the petitioner. This was based upon recovery of three slips of paper from the premises of the Prabhat Oil Mills when there was inspection by the Sales Tax Officer on 29th May 1969. The Prabhat Oil Mills admittedly belonged to the petitioner. According to the Sales Tax Officer, at the time the premises of the Oil Mills were inspected by him the person in charge of the business was one Bharathan, said to be an employee of the petitioner. The said Bharathan is said to have given a statement to the said Sales Tax Officer, but when it was taken down by the officer and Bharathan was asked to sign he is said to have declined that request. The receipt drawn up for the three slips taken from the premises is said to have been offered to Bharathan but he is said to have declined to receive it. Based on the three slips of paper it was proposed that the books of account of the assessee were to be rejected and the assessment made to the best of judgment. These slips, it is said, noted transactions in copra, oil and oil cakes which were not reflected in the regular accounts of the assessee. The slips, it is said, indicated suppression of a larger turnover on 21st May 1969, 24th May 1969, 26th May 1969, 27th May 1969 and 28th May 1969. Based on what was assumed as such suppression of the turnover of the copra, oil and oil cake during the above said five days the turnover for the whole year assuming suppression of the same pattern for the year was estimated by the assessing authority. The pre assessment notice issued to the petitioner he filed a reply on 21st February 1972. In the reply the petitioner assessee did not deny the fact of inspection of the premises by the Sales Tax Officer on 29th May 1969. As to the assumption that the slips related to the business what was said in the said reply was: "Your assumption that the slips related to my business transaction was wrong. I have not maintained any such slips". Though there was no categorical denial that one Mr. Bharathan was not present in the premises at the time of inspection it was contended that the petitioner had no employee by the name Bharathan. In this context what is seen stated is: "The information given by A. P. Bharathan cannot be taken against me. I have no employee by name A. P. Bharathan. The information given by him may not be taken against me." The petitioner applied for certified copies of the slips. The certified copies were issued to him, and further the Sales Tax Officer informed him that he may file further objections, if any, within five days after perusing these certified copies. No such objection was filed within five days nor was any time asked for on the expiry of the period of five days. After the said period the assessment order was passed by the Sales Tax Officer on 19th April 1972. Though there is reference to the objections raised by the assessee we fail to find any consideration of these objections. In fact without considering these objections what is found is that the assessment is being made on a taxable turnover determined in the manner mentioned in the order. The Appellate Assistant Commissioner, considering the three slips taken possession of by the Inspecting Officials, observed that they contained nothing more than a few scribblings jotted down by somebody in the mill, found that the statement said to have been made by Bharathan was not binding on the assessee, that he was not shown to be an employee in the mill, that even reliance on such slips would be of no consequence as they would not reveal anything adverse to the statement of accounts of the assessee and that for these reasons the rejections of the books of account of the assessee and estimation of turnover was uncalled for. In the appeal by the State against the decision of the Appellate Assistant Commissioner the Appellate Tribunal took the view that the materials gathered at the time of inspection can be made use of against the assessee and further that the addition made was proper and reasonable since a pattern of suppression had been disclosed.

(2.) Two questions urged by the revision petitioner's counsel here are: (i) that the statement of Sri. Bharathan ought not to have been relied on to connect the petitioner with the slips of paper said to have been recovered from his premises and further that the assertion made that the slips of paper so recovered would lead to the assumption that the books of account of the assessee were incorrect or incomplete would not be warranted in the circumstances of the case (ii) even assuming that the slips indicate some suppression for five days in the absence of any material to show that there is a pattern of suppression for the whole of the year the addition made on the assumption of such pattern of suppression for the whole year may not be sustainable in law.

(3.) We find from the order of the Sales Tax Appellate Tribunal that the slips recovered from the premises of the Appellant have been related to the accounts of the assessee by reference to the statement said to have been made by Sri Bharathan but not signed by him. Particular mention is made of this in paragraph 10 of the Appellate Tribunal's Order as also in paragraph 12, wherein the relevant part of the statement said to have been made by Bharathan is extracted. The Tribunal has evidently felt that in the absence of denial of the fact of inspection it has to be assumed that the Inspecting Officer who inspected would