RENUKA LEATHER TRADERS Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) This tax case has been filed by the appellant dealer under Section 37(2) of the Tamil Nadu General Sales Tax Act (In short "TNGST Act"?) challenging the order passed by the Commissioner -III, (SMR), Chennai dated 01.12.2005, by exercising its suo motu powers under Section 34 of the Act.

(2.) The assessment is for the year 1994-95. The appellant is a dealer in Tanned skins etc and for the assessment year under question, he claimed exemption in the turnover in Form I return. The accounts of the dealer was called for and examined and defects were noticed, which were pointed by the Assessing Officer. Subsequently, the place of business of the dealer was inspected by the Enforcement Wing on 08.03.1995 and a proposal was sent in Form D-3 dated 16.10.1995. This resulted in revision notice being issued to the appellant based on the findings rendered by the Inspection Wing Officer. The dealer, though received the notice, did not submit their objections and therefore, the Assessing Officer confirmed the proposal in the notice and assessed the turnover. While doing so, the Assessing Officer added the suppression, which was pointed out in the report of the inspecting team officers and also added the turnover for probable suppression. The dealer filed appeal before the Assistant Commissioner (CT), Madurai, which was taken on file in Appeal No.AP351/96. The first appellate authority partly allowed the appeal and modified the assessment order by order dated 10.04.1997. During the course of inspection, three slips were recovered, which were the basis for revision of assessment. The first appellate authority considered the matter and so far as item No.1 is concerned, that is pertaining to slip No.1, the finding rendered by the Assessing Officer was sustained. With regard to Item Nos. 2 and 3, the first appellate authority observed that the dealer proved that the transaction has been duly accounted for in the accounts and addition of the same value to the transaction will amount to double taxation. Therefore, the actual suppression as per Slip No.2 added by the Assessing Officer was deleted. Consequently, the corresponding estimated total from the sales, two time addition was also deleted. Further the penalty was also proportionately reduced. The Joint Commissioner of Commercial Taxes, Chennai exercised suo- motu powers under Section 34 of the TNGST Act and proposed to interfere with the order passed by the first appellate authority.

(3.) A show cause notice dated 29.01.1998 was issued to the dealer calling upon him to explain as to why the order of the Assessing Officer dated 29.03.1996 should not be restored. In the said show cause notice, the reason as to why the Joint Commissioner proposes to exercise his powers under Section 34 of the Act was mentioned. The dealer was represented by a counsel before the authority, who reiterated the stand taken in the reply dated 19.02.1998. It was submitted that there was no suppression in their accounts and therefore, the first appellate authority has deleted the actual and estimated addition. The Joint Commissioner did not agree with the submissions made on behalf of the dealer and modified the order passed by the first appellate authority by confirming the addition at equal times to the actual suppression and also the penalty on actual suppressions. Accordingly, the order of the first appellate authority stood modified. Challenging the same, the dealer is before us by way of this tax case appeal raising the following questions of law:- a. Whether the Joint Commissioner is correct in setting aside the order of the Appellate Assistant Commissioner (CT), Madurai (North) and restoring the order of the assessing officer without properly appreciating the grounds on which the appellants appeal before the Appellate Assistant Commissioner (CT), Madurai (North) was allowed? b.Whether the Joint Commissioner is correct in exercising the powers conferred under Section 34 of the Act in a casual manner when the lower appellate authority has given elaborate findings for allowing the appeal? c.Whether the Joint Commissioner is correct in holding that the appellant admitted before the Officers of the Enforcement Wing that the entries in the slips were not accounted and therefore they are to be treated as suppressions even if they were accounted for subsequent to the inspection? d.Whether the Joint Commissioner is correct in coming to the conclusion that the appellant's accounts are incorrect when the first appellate authority has given a categorical finding that the entries in the slips were all duly accounted for in the books of accounts? e.Whether the Joint Commissioner is correct in distinguishing the facts of the case reported in 3 MTCR Page 82 with that of the appellant's case when he is bound to follow the Principle laid down in the case law relied on by the appellant?