IN THE HIGH COURT OF KERALA AT ERNAKULAM
ST.Rev..No. 317 of 2005()
1. T.V.KUNJUMON, PRINCE FANCY STORES,
... Petitioner
Vs
1. THE STATE OF KERALA, REPRESENTED BY THE
... Respondent
For Petitioner :SRI.K.M.FIROZ
For Respondent :GOVERNMENT PLEADER
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice A.K.BASHEER
Dated :03/09/2008
O R D E R
H.L.DATTU, C.J. & A.K.BASHEER, J.
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S.T.Rev.No.317 OF 2005
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Dated this the 3rd day of September, 2008
ORDER
H.L.DATTU, C.J.
This revision petition pertains to the assessment year 1997-1998.
2. The assessee, a dealer registered under the provisions of Kerala General
Sales Tax Act (for short ‘Act’), has called in question the legality or otherwise of the
orders passed by the Sales Tax Appellate Tribunal in T.A.No.1145/03, dated 25-6-2004.
By the impugned order, the Tribunal has confirmed the orders passed by the First
Appellate Authority.
3. The assessing authority initially had completed proceedings under Section
17(4) of the Act for the assessment year 1997-1998.
4. The assessing authority after completion of the assessment proceedings had
received certain information from the Intelligence Officer of the Department in regard to
to certain purchases both intra and inter-State sales but not reflected in the books of
account maintained in the regular course of business and also had received check post
declarations which had not been accounted by the assessee at the time of scrutiny of the
assessment records while passing assessment orders under Section 17(4) of the Act.
5. The Intelligence Officer of the department, after holding an enquiry, has passed
an order under Section 45A of the Act imposing a penalty of Rs.73,460/- for the offences
said to have been committed by the petitioner under Section 45A of the Act. The orders
passed by the Intelligence Officer is modified by the Deputy Commissioner of
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Commercial Taxes in the revision petition filed by the assessee.
6. After all these proceedings, the assessing authority has initiated proceedings
by issuing a notice under Section 19 of the Act. The notice came to be replied by the
assessee and, thereafter, the assessing authority, making use of the check post
declarations, the information received by the Intelligence Department and after his own
verification, has come to the conclusion that the assessee is a regular defaulter in the
sense, a dealer who is a habitual offender in suppressing the purchase turn overs in his
account books. The assessing authority has observed this aspect of the matter in his
assessment order wherein he has stated, the scrutiny of the assessment records show that
the assessee is regularly practicing purchase suppression and such cases were detected
and utilised for assessment proceedings on almost all years. For the year 1997-1998,
even the assessment order was revised once consequent on detection of purchase
suppression. The contention is therefore rejected. (emphasis supplied by us)
7. While completing the re-assessment proceedings, the assessing authority has
made certain addition to the total and taxable turnover conceded by the assessee.
8. Aggrieved by the re-asssessment order so passed, the assessee had filed an
appeal before the First Appellate Authority in S.T.A.No.979/03. The First Appellate
Authority has modified the assessment order by its order, dated 25-7-2003 and in that has
directed the assessing authority to make an addition of the actual suppression detected by
the concerned authorities, namely, the check post authorities and the Intelligence Officer
of the Department.
9. Aggrieved by the orders so passed by the First Appellate Authority, the
assessee as well as the Revenue had carried the matter by filing Second Appeal before the
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Sales Tax Appellate Tribunal in T.A.No.1145/03 and 22/04 respectively. The Tribunal
by its order, dated 25-6-2004 has rejected the appeals filed by the assessee as well as by
the Revenue. Aggrieved by the orders so passed, the assessee is before us in this revision
petition and the State has accepted the verdict of the Tribunal.
10. We have carefully heard Dr.K.B.Muhammed Kutty, learned Senior Counsel
appearing for the assessee, who submits that the orders passed by the authorities under the
Act and the Sales Tax Appellate Tribunal are arbitrary and capricious.
11. Sri. Mohammed Rafiq, learned counsel for the revenue ably justified the
impugned order passed by the Tribunal.
12. The assessing authority had accepted the returns filed by the assessee and
accordingly passed an order under Section 17(4) of the Act. It is only after receiving the
information from the check post authorities and also the Intelligence Officer of the
Department, has initiated re-assessment proceedings and an opportunity of hearing was
given to the assessee to rebut the omissions pointed out in the notice issued for the
purpose of re-assessment.
13. The assessee had filed its reply and in that had denied the allegation made in
the notice and further has requested to drop the proceedings..
14. The assessing authority, after considering the reply so filed and in view of the
check post declarations and the report of the Intelligence Officer of the Department, has
come to the conclusion that the assessee has suppressed the purchase turn over and,
accordingly, has made certain additions towards the conceded turn over.
15. The fact of suppression of purchase is accepted by the First Appellate
Authority as well as by the Tribunal. But taking into consideration the plea of the
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assessee, have modified the orders passed by the assessing authority by directing the
assessing authority to make an addition of the actual suppression detected by the
Intelligence Officer of the Department and the check post authority.
16. In our opinion, the orders passed by the authorities are purely based on facts.
All the authorities under the Act have given cogent reasons for accepting the
re-assessment orders passed by the assessing authority. Since we are of the opinion that
the decision of the authorities under the Act is purely based on facts, in our opinion,
interference with the orders passed in exercise of powers under Section 41 of the Act is
fully unwarranted.
17. In that view of the matter, while rejecting this revision petition, we answer the
questions of law raised by the assessee against the assessee and in favour of the Revenue.
Ordered accordingly.
(H.L.DATTU)
CHIEF JUSTICE
(A.K.BASHEER)
JUDGE
jes/dk