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2006 DIGILAW 754 (KAR)

NADAF TRADERS v. STATE OF KARNATAKA

2006-09-15

N.ANANDA, R.GURURAJAN

body2006
( 1 ) M/s. Nadaf Traders of Dharwad is before us in this revision petition. ( 2 ) IT is seen from the averments in the revision petition that the petitioner is a dealer covered by the Sales Tax laws of Karnataka. The petitioner filed the annual return of turnover for the assessment year 2000-2001, disclosing total and taxable turnover at Rs. 15,78,664/- and Rs. 13,90,879. 85. He claimed exemption from levy of tax on a turnover of Rs. 1,87,784. 15/ -. The petitioner avers that he has maintained regular books of accounts and all his turnovers are reflected in the books of accounts. The intelligence wing of the department inspected the premises of the petitioner and thereafter, they noticed some irregularities in the matter. They submitted a report to the department. Based on the report, proceedings were initiated and the assessing Officer has chosen to pass an assessment order on the basis of best judgment assessment in the case on hand. Aggrieved by the same, an appeal was filed unsuccessfully. Further, a second appeal was filed by the assessee. The same stood dismissed. The assessee is therefore before us in this revision petition. ( 3 ) THE assessee has framed the following questions of law in the revision petition for our consideration: a) On the facts and in the circumstances of the petitioner's case, whether the Assessing Authority is justified in determining the total and taxable turnover at Rs. 19,11,171. 10 respectively by placing complete reliance on the report of the Commercial Tax Officer (Intelligence), Hubli? b) When the Inspecting Officer did not come across or notice any incriminating material or document during the course of inspection and that when the said Inspecting Authority proceeded merely on suspicion, whether the Assessing Authority is justified in holding that there is suppression of turnover in the petitioner's case? c) Whether the Appellate Authorities were justified in confirming the assessment order levying enhanced tax and penalty? d) Whether on the facts and in the circumstances of the petitioner's case, the levy of penalty under Section 12 (4) of the KST Act, 1957 is justified in law? ( 4 ) THOUGH four questions of law are framed for our consideration, in our view, the first two questions are not available, if at all, there can be only two questions of law. Hence, we deem it proper to consider Questions 'c' and 'd' only. ( 4 ) THOUGH four questions of law are framed for our consideration, in our view, the first two questions are not available, if at all, there can be only two questions of law. Hence, we deem it proper to consider Questions 'c' and 'd' only. ( 5 ) WE have heard Sri S. G. Shivaram, learned Counsel for the assessee, who says that the facts of the case do not warrant any tax or penalty as has been done by the authorities. According to him, there is no suppression warranting any additional tax/penalty on the facts of this case. The learned Counsel would say that the transactions are reflected in the bills produced. The purchase book is bonafide evidence showing the transaction of the assessee. ( 6 ) PER contra, Smt. S. Sujatha, learned Additional Government Advocate for the revenue supports the order of the Assessing Officer. ( 7 ) WE have sought for the original records. The original records are made available to us. ( 8 ) THE Assessing Officer, in terms of his order, has noticed that the assessee was represented by the learned Counsel namely K. P. Awari and he has produced the books of accounts before the authorities. The Assessing Authority also noticed the report of the Intelligence Officer of the commercial Tax Department. The Commercial Tax Officer also noticed that the assessee has also admitted the offence departmentally. After noticing all these aspects of the matter, he has chosen to seek additional tax in addition to penalty in terms of his order dated 19. 05. 2003. The said order was challenged by way of an appeal and the Appellate Commissioner accepted the order of the Assessing Officer. Thereafter, the petitioner moved the Tribunal. The Tribunal also has chosen to accept the order of the Assessing Officer. ( 9 ) AS mentioned earlier, we have called for the original records and in the original records, we see a letter by the assessee with regard to non-accounting of certain purchases in the books of accounts. We have also seen the statement of the assessee at page No. 21 before the tax authorities. There again he admits that the purchases are not reflected in the books of accounts. We have also seen the statement of the assessee at page No. 21 before the tax authorities. There again he admits that the purchases are not reflected in the books of accounts. In the light of this material placed before us in terms of the original proceedings what is clear is the so called the purchases are not reflected in the books of accounts. The Assessing Officer, in the light of the non-accounting of this transaction in the books of accounts, in our view, has rightly taken a view of suppression of material for the purpose of levy of tax in the case on hand. We are of the view that a transaction of any kind ought to find a place in the books of accounts. The books of accounts form the basis of tax collection by the Department. If there is any suppression, it can be termed as suppression of material for the purpose of levy of tax. ( 10 ) IN the circumstances, we are satisfied that the Assessing Officer has rightly taken a view of suppression of material for the purpose of levy of tax in the case on hand. When the same was challenged before the Appellate Commissioner, he has chosen to accept the same. In a further appeal before the Tribunal, the Tribunal noticing non-reflection of the transaction has rightly accepted the order of the Assessing Officer. In our view, all the authorities have held against the assessee. The orders are based on facts. We do not find any legal error in any one of the orders by the officers in the case on hand. Hence, we deem it proper to accept the orders of all the authorities. ( 11 ) THE learned Counsel for the petitioner relies on two judgments reported in (1998) 111 STC 117 and 2004 (56) Kar. L. J. 275 (HC) (DB ). In the first judgment namely Jagadeesh Trading Co. v. Additional Commissioner of Commercial Taxes, Zone II, Bangalore, the Court was considering the transaction as the acceptable one in the light of the supporting bills and the accounting books. In the second case, the Court was considering the levy of penalty. It was noticed that since account book was made only pointed out by the accounting staff, these two judgments are not available to the assessee. In the second case, the Court was considering the levy of penalty. It was noticed that since account book was made only pointed out by the accounting staff, these two judgments are not available to the assessee. The first judgment is in consideration of the Court as per the relevant fact in that case. In the second case, the Division Bench noticed as many as 58 boxes of gutka were duly accounted on the same day of inspection by making a sale bill in the matter. Both the cases stand on different footing. ( 12 ) IN the result, we are of the view that the impugned orders are based on facts. Questions C and d are also answered in favour of the Department. Ordered accordingly. No costs. ( 13 ) SMT. S. Sujatha, learned Additional Government Advocate is given four weeks time to file her memo of appearance.