IN THE HIGH COURT OF KERALA AT ERNAKULAM
ST.Rev..No. 432 of 2005()
1. M/S.KANCOR FLAVOURS & EXTRACTS
... Petitioner
Vs
1. STATE OF KERALA.
... Respondent
For Petitioner :SRI.K.SRIKUMAR
For Respondent : No Appearance
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MRS. Justice M.C.HARI RANI
Dated :23/05/2008
O R D E R
H.L.Dattu,C.J. & M.C.Hari Rani,J.
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S.T.Revn.No.432 of 2005
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Dated, this the 23rd day of May, 2008
ORDER
H.L.Dattu,C.J.
Petitioner is an industrial unit. It is also registered under the
provisions of the Kerala General Sales Tax Act (“K.G.S.T.Act” for short) and
Central Sales Tax Act (“C.S.T.Act” for short). In this revision petition, we are
concerned with the assessment year 1997-98.
2. For the assessment year 1997-98, the assessee has filed his
annual return, conceding a particular total and taxable turnover.
3. During the pendency of the assessment proceedings, the
assessing authority had received certain information from the Check Post
authorities. Since the declarations made before the Check Post authorities
were not reflected either in the books of accounts or in the returns filed, the
assessing authority, after rejecting the return filed by the assessee, has issued
a pre-assessment notice. After receipt of the pre-assessment notice, the
assessee had filed his objections, inter alia contending that the proposals
made in the pre-assessment notice need not be confirmed. The assessing
authority, not being satisfied with the explanation offered by the assessee, has
proceeded to make an addition of 2% for probable omission and suppression
of purchases and sales effected by the dealer.
4. The orders of the assessing authority was the subject matter
of appeal before the first appellate authority. The said authority has modified
the assessments and has limited the additions made by the assessing
authority to a lump sum of Rs.25 lakhs.
5. The assessee, not being satisfied with the orders passed by
the first appellate authority, was before the Tribunal in T.A.No.495 of 2003.
S.T.Rev.432 of 2005 – 2 –
The Tribunal by its order dated 2.3.2005 has rejected the assessee’s appeal.
The findings and conclusions reached by the Tribunal in this regard is as
under:
“The assessing authority rejected the books of accounts
and made best judgment assessment mainly based on
unaccounted purchases as revealed from checkpost
declarations and also on the basis of certain differences
between the books of accounts and the returns filed. For the
irregularities noticed, the assessing authority made 2% addition
to the total turnover conceded. On evaluating and considering
the entire contentions raised, the 1st appellate authority reduced
the addition to 25 lakhs. On verification, it was seen that the
appellant could not satisfactorily explain the unaccounted
purchases found out by the assessing authority. In the above
circumstances, we do not see any reason to further interfere
with the order of the 1st appellate authority”.
6. Assessee being aggrieved by the orders so passed by the
Tribunal is before us in this revision petition.
7. The assessee has framed the following questions of law for
our consideration and decision. They are as under:
a) Is not the Tribunal in error in confirming the best
judgment addition while the revised return filed by the petitioner
tallies with the books of accounts?
b) Is not the Tribunal in error in confirming the best
judgment addition while there was no suppression or omission in
the purchases or sales?
c) Whether best judgment addition is warranted
when no case of suppression or omission is found out by the
assessing and appellate authority?
d) Is not the Tribunal being the highest fact finding
authority erred in confirming the addition when no case of
suppression or omission is unearthed by the assessing
authority?
e) Is not the Tribunal in error in confirming the
addition, while the petitioner had proved beyond the doubt that
there was no suppression or mission in the purchases or sales
to the satisfaction of the 1st appellate authority?”
S.T.Rev.432 of 2005 – 3 –
8. At the outset, we would make it clear that the questions of
law framed by the assessee does not emanate either from the order passed by
the assessing authority or from the order passed by the Tribunal. Now, it is the
well settled position that what is not urged or argued before the authorities
under the Act and before the Tribunal cannot be argued for the first time in a
revision petition before this Court.
9. The legal issues raised by the assessee were never even
canvassed before the assessing authority. It appears from the grounds of
appeal filed before the Tribunal that the assessee had raised a ground that the
revised returns filed by the assessee tallies with the books of accounts and,
therefore, there was no occasion for the assessing authority to have finalised
the pre-assessment on the basis of best judgment assessment. Though that
ground was raised in the memorandum of appeal, it is not forthcoming
whether the said ground was agitated by the assessee or his representative
before the Tribunal. Therefore, in our opinion, what was not urged and argued
before the Tribunal or before the assessing authority cannot be argued before
this Court for the first time in this revision petition.
10. In the above view of the matter, the revision petition requires
to be rejected and it is rejected.
Ordered accordingly.
H.L.Dattu
Chief Justice
M.C.Hari Rani
Judge
vku/-