STATE OF KERALA Vs. MOLLY BABU

JUDGEMENT

(1.) The tax revision cases are filed by the revenue challenging the orders of the Tribunal whereby the Tribunal has directed acceptance of books of accounts for sales tax assessments of the respondent assessee for the assessment years 2002-03, 2003-04 and 2004-05.

(2.) We have heard Special Govt. Pleader appearing for the State and Shri. Harisanker V. Menon for the respondent.

(3.) The respondent commenced business in gold jewellery and in precious stones and diamonds in the year 2001 and continued the same without taking registration or making payment of sales tax. The clandestine business transactions carried on in the residential premises and in two business places were detected on search conducted by the inspection team. In the course of search, the search team examined the business slips, stock statements, note books, scribbling pads etc maintained by the assessee and estimated the purchase and sales during all the four years. It was noticed that the business transaction of the respondent in the individual capacity in 2001 -02 was not of the magnitude that attract sales tax liability. However on evaluation of the seized records for the remaining three years, the department found that the respondent while carrying on business in the name of the partnership firm by name Ross 'N' Glow evaded estimated sales tax of Rs. 1,01,200/- for 2003-04 and Rs. 2,98,763/- for 2004-05. The respondent assessee however made application under Section 47 and offered to compound the offence for non-maintenance of books of accounts and for non-payment of tax dues and the request for compounding was accepted by the department. The respondent accordingly remitted Rs. 1,02;200 for 2002-03 and Rs. 2 lakhs each for the assessment years 2003-04 and 2004-05. The respondent thereby avoided prosecution and penalty.