JUDGMENT K. S. PARIPOORNAN, J. - The revision petitioner is a firm. It is a dealer under the Kerala General Sales Tax Act, 1963. The respondent is the Revenue. In this revision, we are concerned with the assessment for the year 1988-89. The order passed by the Sales Tax Appellate Tribunal, Additional Bench, Ernakulam, in T.A. No. 1081 of 1991 dated February 12, 1992, is under challenge in this revision. The assessing authority rejected the books of account and the returns submitted by the dealer. A best judgment assessment was passed on July 28, 1991. In appeal, the Appellate Assistant Commissioner, Alappuzha, by order dated October 11, 1991, modified the order of assessment to some extent. In second appeal, the Sales Tax Appellate Tribunal, Additional Bench, Ernakulam, by order dated February 12, 1992, dismissed the appeal. The said order of the Appellate Tribunal is under challenge in this revision. 2. We heard counsel. 3. The books of account were rejected since, on inspection of the business place by the intelligence wing, it was found that the assessee was not maintaining correct and complete accounts. The offence was compounded by the assessee by paying Rs. 350. It could be so seen from the proceedings dated April 12, 1989. Excess stock of brandy, beer, wheat powder, etc., were noticed. Shortage of big and small soda bottles was also noticed. The excess stock of liquor was estimated at Rs. 80 and an addition of Rs. 28,000 was made on that score for suppression. Addition of 5 per cent was made to the conceded turnover of cooked food. The sale of soda was estimated at Rs. 11,688 on the basis of the value of shortage noticed at the time of inspection. Similarly, purchase turnover of pappadam was estimated. Unsupported purchase turnover of rice was also estimated and brought to tax. For the various irregularities, omissions and suppressions found out, specific additions were made on all counts. Besides the above, the assessing authority noticed that the opening stock of Indian made foreign liquor as on April 1, 1988, amounted to Rs. 79,896. Adding a gross profit of 40 per cent thereto, the estimated sales turnover of Rs. 1,11,854 was brought to tax. 4. Besides the above, the assessing authority noticed that the opening stock of Indian made foreign liquor as on April 1, 1988, amounted to Rs. 79,896. Adding a gross profit of 40 per cent thereto, the estimated sales turnover of Rs. 1,11,854 was brought to tax. 4. Before us, two points were urged, viz., (i) the accounts should not have been rejected, and (ii) the opening stock of Indian made foreign liquor as on April 1, 1988, represented the stock of such goods as on August 20, 1987 and they were subjected to tax as per entry 36 of the First Schedule. It is only purchases which were effected after August 20, 1987, that could be taxed as per entry 76-A of the First Schedule read along with the Fifth Schedule. So far as the assessee is concerned, the sales after August 20, 1987, were effected from the purchases effected after August 20, 1987. The stock value as on March 31, 1988, constituted only those goods purchased before August 20, 1987. This aspect was omitted to be noticed by the Appellate Tribunal in adding the value of the opening stock of Indian made foreign liquor as per the accounts as on April 1, 1988, in the taxable turnover by adding a gross profit of 40 per cent and thus estimating the sales turnover at Rs. 1,11,854. 5. We find that the accounts and the returns were rejected on very valid grounds. The inspection conducted in the assessee's business place on June 29, 1988 (wrongly stated to be on April 12, 1988) disclosed various discrepancies in the stock of various items and also suppressions. The statutory authorities were justified in rejecting the accounts for the discrepancies noticed in the stock of various items and also for the suppressions found out. The addition of 5 per cent to cooked food and specific additions to many other items are also justified, in view of the various irregularities and suppressions found out. Indeed, the assessee itself compounded the offence by paying Rs. 350. These are relevant factors to be noticed in evaluating the correctness or otherwise of the accounts of the dealer. We are of the view that the accounts were rejected on proper grounds. 6. Counsel for the assessee vehemently contended that the assessee was not given a proper opportunity before addition was made regarding the closing stock as on April 1, 1988. We are of the view that the accounts were rejected on proper grounds. 6. Counsel for the assessee vehemently contended that the assessee was not given a proper opportunity before addition was made regarding the closing stock as on April 1, 1988. There is no merit in this plea. In the pre-assessment notice, the assessee was told about the opening stock as per the accounts as on April 1, 1988, in a sum of Rs. 79,896. The assessee was further told that adding 40 per cent as gross profit, the turnover of Indian made foreign liquor will be estimated at Rs. 1,11,854 and brought to tax at 15 per cent on the sales turnover. For the pre-assessment notice dated July 4, 1991, the assessee filed a detailed reply dated July 11, 1991. In paragraph 4 of the said reply, the assessee has dealt with this aspect. The assessee was given an opportunity to explain. There is no force in the plea that the assessee was not given an opportunity to explain the matter. We reject the said plea. 7. On merits, we are of the view that the Appellate Tribunal has not adjudicated the matter from a proper angle. Paragraph 3 of the pre-assessment notice is to the following effect : "The opening stock of Indian made foreign liquor as per accounts as on April 1, 1988 for Rs. 79,896 is subjected for levy of two tier tax at 15 per cent on its sales. The sales turnover of opening stock of Indian made foreign liquor will be estimated at Rs. 1,11,854.40, i.e., by adding 40 per cent gross profit on Indian made foreign liquor as per accounts and assessed to tax and exemption claimed on the second sale of Indian made foreign liquor disallowed to that extent." The assessee's reply thereto in paragraph 4 is as follows : "Your proposal to estimate the sales turnover representing opening stock as on April 1, 1988, and assess the entire turnover to tax at the rate of 15 per cent is also incorrect and illegal. It is submitted that as per entry 76-A of the First Schedule, the opening stock as on April 1, 1988, could be assessed only at the point of sale and also only in respect of those goods which have suffered tax at the first point of levy as per the Fifth Schedule. It is submitted that as per entry 76-A of the First Schedule, the opening stock as on April 1, 1988, could be assessed only at the point of sale and also only in respect of those goods which have suffered tax at the first point of levy as per the Fifth Schedule. In our case the stock as on August 20, 1987 were subjected to tax at the rate of 55 per cent as per entry 36 of the First Schedule. Only those purchases which were effected after August 20, 1987 were taxed as per the Fifth Schedule. When the two point tax was introduced with effect from August 20, 1987 we could not effect the sale of the stock on August 20, 1987 at a reasonable price since the tax incidence on those stock would have been high as 87.5 per cent (55 + 15 + additional sales tax at 25 per cent). Hence the subsequent sales after August 20, 1987, on which the tax incidence would be only 75 per cent (45 + 15 + additional sales tax at 25 per cent). Thus we were following the last in first out method and the stock as on August 20, 1987 which have suffered tax at the rate of 55 per cent as per the First Schedule were kept unsold and the stock on March 31, 1988 constitute only those goods purchased before August 20, 1987 and since those goods have not suffered tax as per the Fifth Schedule the sales turnover representing those goods cannot be taxed again under entry 76-A of the First Schedule. It is also stated that even if some portion of the stock as on April 1, 1988, constitute purchases made after August 20, 1987, that could be assessed if and only if those goods are actually sold. Therefore your assumption that the opening stock on April 1, 1988, is entirely sold is against law. It is also submitted that we may be allowed a further opportunity to furnish the quantitative details regarding the above submissions." The Appellate Tribunal, in paragraph 5 of its order, has adjudicated this matter thus : "The opening stock value of Indian made foreign liquor as per the account as on April 1, 1988 is Rs. 79,896. The assessing authority added a gross profit of 40 per cent and estimated the sales turnover at Rs. 1,11,854. 79,896. The assessing authority added a gross profit of 40 per cent and estimated the sales turnover at Rs. 1,11,854. This amount is denied exemption. This is justified because that much quantity of liquor turnover is caught in the purview of two-tier taxation. The appellant has not produced any quantitative details of the disposal of Indian made foreign liquor to support his contention of proportionate exemption. In the absence of such specific quantitative details of the sales turnover of Indian made foreign liquor, the contention of the appellant cannot be accepted. In the circumstances, we confirm the denial of exemption as computed by the assessing authority ....." 8. We are of the view that the Appellate Tribunal has not adjudicated the matter from a proper perspective. It is true that the assessee had opening stock as on April 1, 1988 for Rs. 79,896 in respect of Indian made foreign liquor. The plea of the assessee is that it represented the goods purchased before August 20, 1987. It may be that the assessee has not kept separate accounts to show the goods purchased before August 20, 1987 and the dealing relating thereto and the goods purchased after August 20, 1987, and dealt with thereafter. In other words, the assessee did not maintain a separate account of the stock of Indian made foreign liquor that was available with it before August 20, 1987, to show that the closing stock as on March 31, 1988 (opening stock as on April 1, 1988) represented those goods purchased before August 20, 1987. In the peculiar circumstances, it may be plausible for the assessee to contend even in the absence of separate accounts, the natural presumption will be that a person engaged in a business will presumably follow that course which takes him out of the taxable category rather than the other way. We are of the view that the natural presumption that a person engaged in a transaction will presumably follow that course which takes him out of the taxable category may apply in such cases, as held by the Madras High Court in Rathinaswamy Chettiar v. State of Madras [1962] 13 STC 419. This aspect of the matter has not been borne in mind nor viewed in a proper angle by the Appellate Tribunal when it held that the opening stock as on April 1, 1988, in a sum of Rs. This aspect of the matter has not been borne in mind nor viewed in a proper angle by the Appellate Tribunal when it held that the opening stock as on April 1, 1988, in a sum of Rs. 79,896 is not entitled to exemption. The matter requires a second look and a proper appraisal, in the light of entry 76-A of the First Schedule to the Kerala General Sales Tax Act and the principle of law that is discernible from the decision in Rathinaswamy Chettiar's case [1962] 13 STC 419 (Mad.). It is for the final fact-finding authority-the Appellate Tribunal-to pose this aspect since the finding on that score is largely a question of fact in each case. 9. We, therefore, set aside the order of the Appellate Tribunal to the limited extent of assessment of the turnover of opening stock on Indian made foreign liquor as on April 1, 1988 and dealt with by the Appellate Tribunal in paragraph 5 of its order dated February 12, 1992. In all other respects, the order of the Appellate Tribunal is affirmed. We remit the matter to the Appellate Tribunal for a fresh consideration in accordance with law, regarding the inclusion of the sales turnover of the opening stock of Indian made foreign liquor as on April 1, 1988. 10. The tax revision case is allowed, to the above extent. Petition allowed.