IN THE HIGH COURT OF KERALA AT ERNAKULAM
ST.Rev..No. 43 of 2003()
1. STATE OF KERALA, REP. BY
... Petitioner
Vs
1. M/S. CHETTUPUZHA MATHEW & SONS,
... Respondent
For Petitioner :GOVERNMENT PLEADER
For Respondent :SRI.K.I.SAGEER
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice A.K.BASHEER
Dated :27/08/2008
O R D E R
H.L.DATTU, C.J. & A.K.BASHEER, J.
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S.T.Rev.No.43 OF 2003
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Dated this the 27th day of August 2008
ORDER
H.L.DATTU, C.J.
The Revenue calls in question the correctness or otherwise of the
orders passed by the Agricultural Income Tax and Sales Tax Appellate
Tribunal, Additional Bench, Palakkad in T.A.144/94 and 183/94 dated
28th May, 2001. The Revenue has framed the following questions of law
for our consideration and decision. They are as under:
“When book of accounts and return are rejected
by the assessing authority and estimated addition
made on materials is it justified from the part of the
appellate authorities to interfere with the estimation of
addition made on running stock method in the light of
grave irregularities variation and compounding
committed by the assessee.
Is not the finding of the appellate tribunal
reducing the estimation to 5 percentage of the turnover
returned unfair, arbitrary and improportionate to the
variation detected.”
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2. The facts in brief are: The assessee/respondent herein is doing business
in jewellery. The assessment year in question is 1991-1992. The business
premises of the assessee was inspected by the Intelligence Officer of the
Department on 20-2-1992. After physical verification of the stock found at the
time of inspection, the inspecting authority had noticed that there was 6.5 gms of
new ornaments in excess than what was reflected in the stock registers and further
there was a shortage of 21.8 gms of gold than what was reflected in the books of
accounts. It is pertinent to notice here that the total quantity of gold sold by the
assessee during that year was 6350 gms.
3. When it was pointed out to the assessee about the excess and shortage of
old and new gold jewellery, the assessee had compounded the offence
departmentally and in lieu of the prosecution proceedings.
4. The assessee had filed its annual returns before the assessing authority
for the assessment year 1991-1992 and in that had conceded a total and taxable
turn over of Rs.27,88,974.70.
5. The assessing authority, after verification of the books of accounts and in
view of the shop inspection report dated 20-2-1992, had rejected the books of
accounts and the returns filed by the assessee and thereafter had proceeded to
complete the best judgment assessment and has estimated the sales at 4 times the
running stock.
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6. Aggrieved by the quantification so made by the assessing authority, the
assessee had filed the first appeal before the First Appellate Authority in
S.T.A.450/93.
7. The First Appellate Authority, by its order dated 27-12-93, has modified
the quantification of the tax liability of the assessee by reducing it to 25% of the
conceded turn over by the assessee.
8. The assessee and the Revenue, aggrieved by the orders passed by the
First Appellate Authority had carried the matter by way of second appeal before
the Tribunal in T.A.144/94 and 183/94 respectively. The Tribunal, in the appeal
filed by the assessee, has further reduced the addition made by the assessing
authority to 5% of the conceded turn over and consequently rejected the appeal
filed by the State in T.A.183/94. The correctness or otherwise of the orders passed
by the Tribunal is the subject matter of this revision petition.
9. First and foremost, the orders passed by the authorities under the Act and
the Tribunal is purely based on the facts. No question of law as such would arise
for our consideration. The revision petition can be entertained by this court only
on two grounds. Firstly, if the Tribunal has failed to decide the question of law or
has erroneously decided the question of law. At this stage, we also intend to add,
if the finding of fact arrived at by the Tribunal which is the last fact finding
authority is a perverse one, then also it will be a question of law which can be
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looked into by this court in exercise of its power under Section 41 of the Act.
10. The facts which have narrated would clearly demonstrate that the
estimation has been made by the assessing authority while quantifying the liability
for the assessment year 1991-1992 on the basis of the best judgment assessment.
11. The First Appellate Authority and the Tribunal has scaled down the
additions made by the assessing authority. All these has been done purely based
on the facts pleaded by the assessee and countered by the Sale Tax representatives.
In our opinion, no question of law as such would arise for our consideration and
decision. Therefore, while affirming the finding of the Tribunal, we reject this
revision petition.
12. Consequently, I.A.No.54 of 2008 stands dismissed.
Ordered accordingly.
(H.L.DATTU)
CHIEF JUSTICE
(A.K.BASHEER)
JUDGE
jes