DEVENDRA SETHIA Vs. STATE OF ASSAM AND ORS.

JUDGEMENT

(1.) The petitioner entered into a contract with Sahara Airlines for supply of food articles for catering to passengers in the aircraft of the latter. Rates at which the articles were to be supplied were finalised and incorporated in the agreement. Sales were virtually in the nature of bulk sales. The sales tax authorities found that the rates fixed for sales to the airliner was much lower than the market value of sales made by the petitioner at his restaurant, therefore disagreed with the rates shown for the sales made to the airliner as undervalued and with reference to the prices at which the articles sold at the restaurant is considered for assessment and also found that there is wilful evasion of tax and levied a maximum penalty. The petitioner aggrieved by the said order (at annexure G) filed this petition. The provisions of section 2(44) of the Assam Value Added Tax Act, 2003, hereinafter referred to as the AVAT Act, defines the "sale price" in the following manner :

(2.) The provisions of section 78 of the AVAT Act is a provision where it is provided that if goods are undervalued the Department has power to purchase the said undervalued goods after giving reasonable opportunity of being heard to the owner of the goods. The provisions of section 78(1) is extracted hereunder for convenient reference.

(3.) The counsel for the petitioner relied on the decision of a Division Bench of the Andhra Pradesh High Court in Delux Wines v. State of Andhra Pradesh, 1990 77 STC 373, where the Andhra Pradesh High Court made the following observation (pages 388 and 389 in 77 STC):