HINDUSTAN STEEL DISTRIBUTORS Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE assessee is the petitioner. THE assessee is Hindustan Steel Distributors, No. 11, Sembudoss Street, Madras-1, dealing in iron and steel. THE assessee filed a return, showings turnover of Rs. 37, 44, 925.56 and claimed second sale exemption for the assessment year 1979-80. THEre was a raid conducted by the Income-tax Department. THE assessing officer on check of accounts found that the place of business of the assessee was inspected by the Income-tax Department officers, who recovered certain records and also verified the stocks and noticed excess stock of 5.229 tonnes of iron and steel and also found undisclosed stock of 36.707 tonnes in the unregistered open-yard. THE further investigation of the record recovered by the Income-tax Officer revealed that the assessee have sold 22 items of iron and steel goods, totally weighing 218.243 tonnes for which relevant purchase bills were not available. On the basis of this verification, the assessing officer arrived at the suppressed quantity as 253.346 tonnes and estimated the suppressed sales turnover at Rs. 7, 60, 038, taxable at 4 per cent and also levied a penalty of Rs. 7, 548. On appeal, the Appellate Assistant Commissioner estimated the suppressed quantity as 160 tonnes and arrived at the suppressed turnover at Rs. 4, 80, 000 and also reduced the penalty to Rs. 5, 000. Thus the order passed by the assessing officer was modified by the Appellate Assistant Commissioner.

(2.) AGGRIEVED, the assessee filed an appeal before the Appellate Tribunal. The Tribunal considering the overall facts, thought fit to fix the suppressed turnover roughly at Rs. 2 lakhs, taxable at 4 per cent and the Tribunal also held that the levy of penalty of Rs. 1, 500 would be reasonable. Accordingly, the penalty was reduced from Rs. 5, 000 to Rs. 1, 500. In that view of the matter, the Tribunal modified the order passed by the Appellate Assistant Commissioner. It is against this order, the assessee is now in revision before this Court.

(3.) ON the other hand, the learned Additional Government Pleader (Taxes), while supporting the order passed by the Tribunal, submitted that the Tribunal without ascertaining or furnishing any particulars, simply reduced the suppressed sales turnover as determined by the Appellate Assistant Commissioner. So also in the matter of levy of penalty, the Tribunal has not assigned any reason for reducing the same from what was levied by the Appellate Assistant Commissioner. It was submitted that the Appellate Assistant Commissioner accepted the explanation offered by the assessee for 93 tonnes. But the Appellate Assistant Commissioner requested the assessee to furnish explanation with regard to the sales turnover of 160 tonnes. Even though the Appellate Assistant Commissioner granted time and opportunity to the assessee to furnish explanation for the sales turnover of 160 tonnes, no acceptable evidence was offered by the assessee. In the absence of any explanation as to the suppressed sales turnover of 160 tonnes, it was submitted that the Tribunal was not correct in reducing the suppressed sales turnover determined by the Appellate Assistant Commissioner. The learned Additional Government Pleader (Taxes), pointed out that admittedly the assessee is not having accounts for maintaining opening stock and closing stock. The details of the sale of 22 items as pointed out in the order of the assessing officer was not explained. The learned Additional Government (Taxes) further submitted that the assessee has also not furnished any explanation to show that the sales turnover of 160 tonnes is included in the sales turnover of 531 tonnes. According to the learned Additional Government Pleader (Taxes) since the sales turnover relating to 160 tonnes remains unexplained, the assessee is not entitled to say that the sales turnover of 160 tonnes is second sales, and therefore even assessing that it is a suppressed sale, it should be exempted. For these reasons, it was submitted that this is a case where the department should file a revision petition, inasmuch as the Tribunal reduced the suppressed turnover and the penalty without assigning any proper reason.