IN THE HIGH COURT OF KERALA AT ERNAKULAM
ST.Rev..No. 397 of 2006()
1. D. GOPALAKRISHNA BHAT,
... Petitioner
Vs
1. THE STATE OF KERALA.
... Respondent
For Petitioner :SRI.RAJESH NAMBIAR
For Respondent : No Appearance
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice A.K.BASHEER
Dated :26/09/2008
O R D E R
H.L.DATTU, C.J. & A.K.BASHEER, J.
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S.T.Rev.No.397 of 2006
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Dated, this the 26th day of September, 2008
ORDER
H.L.Dattu, C.J.
This Sales Tax Revision is directed against the orders passed
by the Kerala Sales Tax Appellate Tribunal, Additional Bench, Kozhikode
in T.A.No.270 of 2004 dated 28th April, 2005.
(2) Petitioner is engaged in the sales of the water supply and
sanitary fittings including motor pumps, compressors, etc.
(3) The returns filed by the assessee for the assessment year
1999-2000 was not accepted by the assessing authority and accordingly
relying on the check post declaration, has completed the best judgment
assessment as provided under Section 17(3) of the Kerala General Sales
Tax Act, 1963 (‘the Act’ for short) and has made certain additions towards
the probable omissions and suppressions.
(4) Aggrieved by the said order, the assessee had filed first
appeal before the first appellate authority. The first appellate authority
while rejecting the appeal has concurred with the findings and conclusions
reached by the assessing authority.
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(5) Inter alia, questioning the correctness or otherwise of
the orders passed by the first appellate authority, the assessee had filed
second appeal before the Sales Tax Appellate Tribunal in T.A.No.270 of
2004. The Tribunal by its orders dated 28.4.2005 has rejected the
assessee’s appeal.
(6) Being aggrieved by the aforesaid orders, the assessee is
before us in this Sales Tax Revision.
(7) The assessee has framed the following questions of law
for our consideration and decision. They are as under:
“i) Whether the order of the Sales Tax Appellate
Tribunal is correct on law, facts and circumstances of the
case?
ii) The petitioner stated case before the Appellate
Tribunal was that the petitioner was in possession of the
book of accounts and he was prevented from producing
the same before the assessing authority by reason of ill
health and he had requested for an opportunity for
production of the same. Has not the Tribunal erred in law
in sustaining the assessment order without giving an
opportunity to the petitioner to produce the books of
accounts?
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iii) Form No.27B declarant ought to have been put
to the test of cross examination and Section 30B(4)
proceedings should have been initiated against the alleged
consignor. The tribunal did not apply its mind to this
specific contention of the petitioner raised before it. Is the
finding of the tribunal ignoring relevant contentions of the
petitioner and based on irrelevant considerations,
sustainable on law, facts and circumstances of the case?
iv) The Tribunal ought to have found that the
additions made by the assessing authority are highly
excessive, arbitrary and have no rational nexus with the
defects noted. Has not the tribunal grossly erred in law
and on facts in sustaining the additions made by the
assessing authority?
(8) The order of assessment passed by the assessing
authority for the assessment year in question is on estimation basis.
(9) Time and again the apex Court has observed that in
exercise of the powers of this Court under Section 41 of the Act, it can
only look into whether the Tribunal has failed to decide a question of law
or has erroneously decided a question of law.
(10) The Supreme Court in the case of Commissioner of
Sales Tax Madhya Pradesh Vs. H.M.Esufali H.M.Abdulali {1973 (32)
STC 77) has stated as under:
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“The reassessments were valid. From the circumstance
that the assessee had dealings outside the accounts of the
value of Rs.31,171.28 for 19 days, it was open to the
officer to infer that the assessee had large scale dealings
outside the accounts. In such a situation, it was not
possible for the officer to find out precisely the turnover
suppressed and he could only make an estimate of the
suppressed turnover on the basis of the material before
him. So long as the estimate made by him was not
arbitrary and had a reasonable nexus with the facts
discovered, it could not be questioned. It was wrong to
hold that the officer must have material before him to
prove the exact turnover suppressed.”
(11) This is a case of best judgment assessment. In that
best judgment assessment, the assessing authority had the advantage of
verifying the records. On verification of the records, the assessing
authority had found that several check post declarations received from the
check post were not seen accounted in the purchase list produced by the
assessee, and that in spite of repeated notices, the assessee has not
produced the books of accounts before him for verification. Therefore,
based on the information available, the assessing authority has completed
the best judgment assessment. It is not a case where the best judgment
assessment has been made without any basis whatsoever.
(12) In that view of the matter, we are of the opinion that no
question of law as such would arise in this revision petition for our
consideration and decision.
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(13) Therefore, while rejecting the revision petition, we
confirm the orders passed by the Tribunal.
Ordered accordingly.
(H.L.DATTU)
CHIEF JUSTICE
(A.K.BASHEER)
JUDGE
vns