STATE OF TAMIL NADU Vs. KRISHNA OIL MILLS

JUDGEMENT

(1.) THIS Tax Case (Revision) is directed against the order dated March 27, 1992 of the Tamil Nadu Sales Tax Appellate Tribunal, Madras - 104 (Main Bench) (for short "Tribunal") and made in T.A. No. 851 of 1991 relating to the assessment year 1989-90 under the provisions of the Central Sales Tax Act, 1956 (Act No. 74 of 1956 - for short "CSTA"). The assessee-dealers - Tvl. Krishna Oil Mills, having their place of business at No. 34/3, Vellore Main Road, Arcot, is coming within the jurisdiction of the Deputy Commercial Tax Officer, Arcot. For the assessment year 1989-90, the assessee-dealers submitted their return under CSTA. The business premises of the assessee-dealers, it is said, was inspected on January 30, 1990 by the Enforcement officials and certain slips were recovered. One such slip recovered was slip No. 5 recovered under D7 records. The said slip No. 5 was written in the letter pad of Tvl. Krishna Oil Mills. On verification of the said slip, the following factors were revealed, in the sense of the said slip reading as below :

(2.) THE Enforcement officials, it appears, demanded explanation for the entries in the said slip. One A. Gopal Chettiar, claiming to be a partner, stated that they sold 9, 570 kgs. of groundnut oil to Bombay dealers. Tvl. Ahamed Umar Bai in bill No. 4/22.8.1989 for Rs. 2, 63, 175 and the same was despatched in lorry No. TCZ 2655. For the difference of 355 kgs. between this sale bill and the slip, he had stated that after weighment, 355 kgs. were filled up to adjust the lorry hire. This sort of an explanation, as trotted out by the said A. Gopal Chettiar, was not accepted by the assessing officer as the weight of the oil sold and noted in the sale bill did not tally and further the assessee-dealers would have sold many loads of groundnut oil and the said loads could have been sent in the same vehicle so many times. As long as the slip did not contain the date, the different transactions contained in the slip had to be taken as sales of groundnut oil, outside the State, during the current year and consequently, they are treated as sales suppression of groundnut oil of 9, 215 kgs. THE assessee-dealers had not supported the said turnover by production of "C" forms and consequently, the same had been taxed at ten per cent under CSTA, valuing 9, 215 kgs. of groundnut oil at the rate of Rs. 27.50 per kg., which comes to Rs. 2, 53, 414. THE value of Rs. 27.50 per kg., it appears, had been worked out from bill No. 4 dated August 22, 1989. THE said bill gives the sale value of 9, 570 kgs. of groundnut oil at Rs. 2, 63, 175. Since there was sales suppression of groundnut oil, as stated above, the assessing officer rejected the accounts as incorrect and incomplete and the assessing officer assessed the dealers to the best of his judgment for the assessment year 1989-90. THE assessing officer also levied penalty under section 9 of CSTA read with section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act No. 1 of 1959 - for short, "TNGSTA") at 50 per cent of the tax due at Rs. 25, 341 on the actual suppression of turnover of Rs. 2, 53, 414 and the penalty was calculated at Rs. 38, 012.

(3.) THERE is another entry as "load 15, 875". In the business world, practice appears to be that before ever, the lorry is loaded, the weight of the lorry is determined first and then the lorry is loaded with the goods and the weight of the lorry and the goods are found out by weighing the lorry in the weigh bridge after loading. THEREfore, the entry "empty 6, 660" may mean weight of the lorry, before ever it is loaded and the other entry "load 15, 875" may mean the weight of the lorry after it is being loaded. THEREfore, the explanation given by the said A. Gopal Chettiar for deducing the figure at 9, 215 kgs., as covered by the slip, without any demur, may be accepted. But, at the same time, one should not omit to take notice of the difference in kgs. of groundnut oil between slip No. 5 and bill No. 4 dated August 22, 1989. In slip No. 5, an excess quantity of groundnut oil to the extent of 355 kgs. had been dealt with in comparison to the bill No. 4 dated August 22, 1989. The value of 355 kgs. of excess quantity dealt in slip No. 5, if valued at the rate of Rs. 27.50 per kg. would work out at Rs. 9, 762.50.