VEL METAL INDUSTRIES Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THIS is a revision case filed by M/s. Vel Metal Industries, questioning the order of the Tamil Nadu Sales Tax Appellate Tribunal, Coimbatore Bench, dated 18th July, 1978, passed in C.T.A. No. 210 of 1978, confirming the order of the Appellate Assistant Commissioner (CT) Vellore, North Arcot District, with respect to the assessment year 1976-77.

(2.) THE revision petitioner herein did not report any turnover for the assessment year 1976-77. Accounts were called for and checked. It was found that the revision petitioner did not maintain a production-cum-stock account in form XXX as laid down in rule 26(14). No details were available to verify the actual stock of any particular date. A low gross profit of Rs. 386.32 was mentioned. So, the accounts were rejected and the assessing officer had chosen to add 20 per cent for probable omissions and also 20 per cent for gross profit and determined a total and taxable turnover as Rs. 52, 071. THE revision petitioner preferred an Appeal No. 876 of 1977 before the Appellate Assistant Commissioner, Salem and it was transferred to the file of the Appellate Assistant Commissioner, Vellore and numbered as Appeal No. 959 of 1977. THE Appellate Assistant Commissioner did not agree with the contentions of the revision petitioner herein and dismissed the appeal. Aggrieved by the said order, the second appeal was preferred before the Tribunal. On the point whether the order of the Appellate Assistant Commissioner is liable to be set aside, the Tribunal came to the conclusion that the officers were justified in not giving a relief to be assessed under section 7 also and also rejecting the contention raised on behalf of the revision petitioner before it that there are circumstances warranting the assessing authorities as well as the lower appellate authority to assess on the basis of the "best judgment assessment".

(3.) A reference to page 51, according to the Tribunal, showed that there were only 2 items of purchases totalling to 238.320 kgs. There is another entry in pencil for 38.700 kgs. The Tribunal could not reconcile this entry inasmuch as it had interrogated itself as to the source regarding this particular entry which resulted in its rejection of the very accounts maintained and had given rise to a circumstance enabling it to assess the revision petitioner herein on the basis of the "best judgment assessment". Aggrieved by the conclusion arrived at by the Tribunal on the basis of its inference that normally, in this line of business, the gross profit vary from 20 per cent to 25 per cent and especially when the revision petitioner has shown only 1 per cent gross profit, the Tribunal rejected the account maintained by the revision petitioner. The Tribunal has also observed that the contention that the revision petitioner herein is new in the business and so there is no profit cannot be accepted. The Tribunal further observed that the officers below have chosen to add only 20 per cent for probable omissions, and similarly the addition of 20 per cent towards gross profit is also normal in this line of business. According to the Tribunal, since the accounts have not been properly maintained, 20 per cent addition is very nominal, and so the revision petitioner herein is not entitled to any relief. So, the Tribunal confirmed the assessment made by the assessing authorities which in turn was confirmed by the Appellate Assistant Commissioner. Before the Tribunal it is urged that the revision petitioner was not even given an opportunity for assessment under section 7 but nowhere before the officer below and even before the Tribunal, the revision petitioner herein made a specific offer to be assessed under section 7 and therefore, the Tribunal held that the officers below were justified in not giving a relief to be assessed under section 7 also, and the Tribunal dismissed the appeal preferred by the revision petitioner.Mrs. Chitra, Venkataraman, learned counsel for the revision petitioner herein, inter alia, contended that the Tribunal is not correct in confirming the orders of the assessing authority and the Appellate Assistant Commissioner.