SANTOSHI TEL UTPADAK KENDRA Vs. DEPUTY COMMISSIONER

JUDGEMENT

(1.) The only question that falls for consideration in this petition is whether the Commissioner of Sales Tax can exercise his power of revision under section 57(1)(a) of the Bombay Sales Tax Act, 1959, in respect of an order passed by the Assistant Commissioner in appeal against which a second appeal preferred by the assessee is pending before the Maharashtra Sales Tax Tribunal. The facts leading to the present petition briefly stated are as follows : The petitioner was at the relevant time a partnership firm and was registered as such. It appears that it was constituted on 12th June, 1970, and consisted of three partners, namely, Kundanlal, Bhikarilal and Harinarayan, who are sons of Bhaiyalal, since deceased. This firm was carrying on the business of manufacturing and selling vegetable oil. It is alleged that the business of this firm being managed by Bhaiyalal during his life-time. Bhaiyalal expired on 15th May, 1972. It appears that the books of account of the petitioner-firm were not properly maintained for the period from 1st January, 1971, to 30th June, 1972. In any case, Kundanlal and Bhikarilal, who were major partners of the firm, since at that time Harinarayan was minor, maintained that the accounts were being kept by Bhaiyalal and they were not concerned with the accounts and did not known anything about them. It further appears that on 16th June, 1972, Mr. Girase, Sales Tax Officer at Nagpur, paid a surprise visit to the place of business of the petitioner-firm and seized several account books alone with some documents. It also appears that the residence of the partners of the firm was also searched and some incriminating documents were recovered during that search. Now it seems that the returns form the period from 1st January, 1971, to 31st December, 1971 (hereinafter referred to as the first period), had been filed earlier on behalf of the petitioner-firm. The Sales Tax Officer took up proceedings under sub-section (3) of section 33 of the Bombay Sales Tax Act, 1959, (hereinafter referred to as "the Act"). With regard to the return for the first period, he compared the entries in the books of account on the basis of which the returns of the period had been filed with the entries in the books which had been seized during the raids at the business premises of the firm as well as at the residence of the partners. The Sales Tax Officer, on comparison of these two sets of account books, found that there were several discrepancies inasmuch as several transactions which had been entered in the second set of books of account did not find place in the books of account which were produced by the firm during the assessment proceedings. On this basis the Sales Tax Officer issued a show cause notice stating the requisite details and asked for an explanation to which the petitioner-firm submitted its explanation. After considering the explanation which was thus submitted by the firm, the Sales Tax Officer was of the view that there was suppression of sales and purchases on the part of the firm and the return which had been filed did not truly and correctly reflect the transactions and the turnover of the petitioner-firm. In the view which he took, the Sales Tax Officer proceeded to make an estimation of the turnover of the sales and purchases for the first period and for this purpose he took into account the consumption of electrical energy by the firm during the said period for the purposes of running its mill. The Sales Tax Officer also took into account the stock as disclosed in some of the books of account which he had seized during the raid and considering all these factors, the Sales Tax Officer determined the extent of the alleged suppression of turnover of sales and purchases indulged in by the petitioner-firm. It appears that for the first period the Sales Tax Officer, by his order dated 26th March, 1973, levied a tax of Rs. 73,198.62, together with total penalty of Rs. 36,197.64.

(2.) It further appears that so far as the period from 1st January, 1972, to 30th June, 1972 (hereinafter referred to as the second period) was concerned, the petitioner-firm had failed to file any return either monthly or quarterly. The Sales Tax Officer appears to have gone into and scrutinised the two sets of account books referred to earlier and on the same factors and considerations on which he determined the extent of the alleged suppression of turnover of sales and purchases, with respect to the first period, the Sales Tax Officer also worked out the extent of the suppression of the turnover for the second period also and proceeded to levy tax and penalty in regard to that period. He levied tax of Rs. 81,745.71 together with total penalty of Rs. 37,572.26 with regard to the second period under his order dated 26th March, 1973. Apparently, these orders were passed by the Sales Tax Officer in pursuance of his powers under section 33 of the Act.

(3.) Being aggrieved by the assessment of tax and the levy of penalty by the Sales Tax Officer, under his abovesaid orders, the petitioner-firm preferred two appeals for the abovesaid two periods before the concerned Assistant Commissioner, by virtue of section 55(1)(a) of the Act. The Assistant Commissioner, while deciding the two appeals, was of the view that the Sales Tax Officer had fallen into error in estimating the turnover of sales and purchases on the basis of the consumption of electricity, inasmuch as the Sales Tax Officer did not take into consideration the fact that the mill of the petitioner-firm had not been working continuously throughout the period of assessment but only during a part of it. The Assistant Commissioner was of the view that the Sales Tax Officer had not taken into consideration the contention of the petitioner-firm that out of the several purchases effected by it, a bulk of them was from outside the State of Maharashtra. For this and other reasons, the Assistant Commissioner reduced the quantum of the turnover of the sales and purchases as estimated by the Sales Tax Officer to a much smaller figure for both the abovesaid periods and, consequently, reduced the tax for the first period to Rs. 30,494.67 and the penalty to Rs. 11,745.71 and the tax for the second period to Rs. 16,447.33 and the penalty to Rs. 5,572.26. It would thus appear at once that the Assistant Commissioner effected substantial reduction in the amounts of tax and penalty under his appellate order passed on 29th September, 1973.