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1990 DIGILAW 427 (KER)

SIVA TRADERS v. STATE OF KERALA.

1990-10-22

K.P.BALANARAYANA MARAR, K.S.PARIPOORNAN

body1990
JUDGMENT K. S. PARIPOORNAN, J. - The revision-petitioner is an assessee under the Kerala General Sales Tax Act, 1963. The assessee is doing business in arrack and toddy. We are concerned with the assessment year 1985-86. There was surprise inspection of the business premises conducted by the Intelligence Officer on November 6, 1985. Huge quantity of unaccounted purchases of arrack and some other irregularities were found out. Seven slips containing details were recovered from the business premises. The assessee himself filed an application for compounding the offence in the sum of Rs. 30,000. It was accepted. The assessing authority rejected the accounts and the book results and an estimate was made. The first appellate authority dismissed the appeal. The Appellate Tribunal, by its order dated December 22, 1987, substantially decided the appeal in favour of the assessee. The Revenue filed a revision in this Court (T.R.C. No. 119 of 1989). The order passed by the Appellate Tribunal was set aside by judgment dated July 19, 1989 (Reported as Deputy Commissioner of Sales Tax v. Siva Traders in [1990] 79 STC 343 (Ker).) and a remit was ordered to the Tribunal. It is in pursuance to the said order of remit, the Appellate Tribunal decided the matter again and allowed the appeal to the limited extent stated in paragraph 8 of the appellate order dated March 27, 1990. The assessing authority was directed to fix the suppression for the year at 1,03,251 litres instead of 1,06,788 litres. The assessment was modified only to this extent. Aggrieved by the order passed by the Sales Tax Appellate Tribunal dated March 27, 1990, the assessee has come up in revision. 2. We heard counsel for the revision-petitioner Mr. E. R. Venkiteswaran. As could be seen from paragraph 5 of the order passed by the Sales Tax Appellate Tribunal, the assessee's counsel did not canvass for the acceptance of the books of accounts. The results of the inspection, recovery of the slips and other records by the Intelligence Officer were not seriously disputed. The admission made by the assessee in the compounding application at the time of inspection was not disputed. The counsel for the assessee did not produce the original slips detected at the time of inspection, on the basis of which the assessing authority estimated the turnover for the year. The admission made by the assessee in the compounding application at the time of inspection was not disputed. The counsel for the assessee did not produce the original slips detected at the time of inspection, on the basis of which the assessing authority estimated the turnover for the year. So, the only question argued before the Appellate Tribunal, as is evident from the appellate order, was that the estimate made by the assessing authority is highly excessive and arbitrary. 3. The Appellate Tribunal has adverted to the fact that the seized slips, returned to the assessee with the signature of the Intelligence Officer on March 24, 1986, were not produce before the assessing authority or even before the Appellate Tribunal. The managing partner had admitted the unaccounted purchases of 60,230 litres of arrack from "other sources" and this was not brought to account. There was no evidence to prove that this had suffered tax at the purchase point. The offence of non-maintenance of true and correct account was admitted and compounded departmentally on payment of Rs. 30,000. The suppression actually detected at the time of inspection was 62,293 litres of arrack. The suppression related to the period of seven months from April 1, 1985 to October 31, 1985. The assessing authority as well as the Appellate Tribunal made an addition to cover the suppressions for the remaining period of the year also. Counsel for the assessee contends that this is not permissible. 4. We are unable to accept the said plea. In a case where large scale suppressions were found out and the offence was admitted by the assessee, an estimate of turnover was called for. The estimate is always for the whole year. That was what has been done in the instant case. The plea now made, that there was no suppression for the period subsequent to October 31, 1985, is based on no material. The inspection was on November 6, 1985. The assessee could have shown, by adducing evidence, that after the inspection on November 6, 1985, he was maintaining true and correct accounts and the turnover disclosed will vouchsafe that plea. No such attempt was made at any time. The inspection was on November 6, 1985. The assessee could have shown, by adducing evidence, that after the inspection on November 6, 1985, he was maintaining true and correct accounts and the turnover disclosed will vouchsafe that plea. No such attempt was made at any time. The Appellate Tribunal, as a fact-finding authority, has categorically stated in paragraph 8 of its order that there is no valid ground to hold that the assessee discontinued the practice of purchasing arrack from outside sources immediately after the inspection. This is a finding of fact. When once the accounts and returns are rejected, an estimate of the turnover for the whole year was called for. The suppression in this case unearthed related to a period of seven months (April 1, 1985 to October 31, 1985). It was substantial - 62,293 litres of arrack. Based on this, the estimate made for the whole year is justified and is in accord with the decision of the Supreme Court in Commissioner of Sales Tax v. H. M. Esufali H. M. Abdulali [1973] 32 STC 77. It was open to the fact finding authority to infer that the assessee had large scale dealings outside the accounts for the whole year. As stated by the Supreme Court, it was not possible for the assessing authority to find out precisely the turnover suppressed and he could only make an estimate of the suppressed turnover on the basis of the materials available before him, including the materials unearthed at the time of inspection. The estimate so made for the whole year has a reasonable nexus with the facts discovered. It cannot be said that the best judgment assessment made in the instant case is in any way arbitrary or it had no rational basis. The assessing authority is the sole judge of the situation. It is his best judgment assessment. As the final fact-finding authority, the Appellate Tribunal concurred with the best judgment assessment, except in regard to the slight modification stated in paragraph 8 of its order. 5. We are of the view that the decision of the Appellate Tribunal cannot be attacked as erroneous in law. To confine the addition to the quantum unearthed, as urged by counsel, will be to act mechanically - a negation of the best judgment assessment. 6. 5. We are of the view that the decision of the Appellate Tribunal cannot be attacked as erroneous in law. To confine the addition to the quantum unearthed, as urged by counsel, will be to act mechanically - a negation of the best judgment assessment. 6. Counsel for the assessee pleaded that liquor was taxable at the first point and in the instant case, for the second sale of liquor, tax has been levied. This plea does not seem to have been raised before the Appellate Tribunal. There is no adjudication on this score. Under section 41 of the Kerala General Sales Tax Act, this Court can revise an order of the Appellate Tribunal only if it decides erroneously or failed to decide a question of law. Admittedly, that is not the case herein. The further plea of the counsel that the fixation of Rs. 40 as the price per litre was not proper. The Appellate Tribunal has given cogent reason to fix the price per litre at Rs. 40, in paragraph 9 of its order. This is a finding of fact. 7. We are of the view that the decision of the Appellate Tribunal does not suffer from any infirmity. No interference is called for in this revision. The tax revision case is dismissed in limine. Petition dismissed.