IN THE HIGH COURT OF KERALA AT ERNAKULAM
ST.Rev..No. 12 of 2010()
1. THE STATE OF KERALA, REPRESENTED BY
... Petitioner
Vs
1. M/S. ORMA MARBLE PALACE (P) LTD.,
... Respondent
For Petitioner :GOVERNMENT PLEADER
For Respondent :SRI.ISSAC M.PERUMPILLIL
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice P.S.GOPINATHAN
Dated :09/06/2010
O R D E R
C.N.RAMACHANDRAN NAIR &
P.S.GOPINATHAN, JJ.
....................................................................
S.T. Rev. Nos.12 & 19 of 2010
....................................................................
Dated this the 9th day of June, 2010.
JUDGMENT
Ramachandran Nair, J.
Heard the Government Pleader for the common revision
petitioner and counsel appearing for the group companies, the
respondents in the connected case. After completion of the sales tax
assessments of the respondents for the assessment year 1999-2000, it
came to the notice of the Deputy Commissioner that respondents have
been subjected to search and block assessment was made for the
undisclosed business income under the Income Tax Act. Based on the
block assessments completed by the Income Tax Department, the
Deputy Commissioner directed revision of assessment under Section
35 against which respondents filed appeals before the Tribunal. By the
time the Tribunal took up the appeals, the block assessments completed
under Section 158BC of the Income Tax Act were interfered with by
the Commissioner of Income Tax (Appeals) and he cancelled the
addition of undisclosed income. Since the Income Tax assessments
S.T. Rev. 12&19/2010 2
formed the basis of the order of the Deputy Commissioner, the
Tribunal relying on C.I.T.(Appeal)’s order in appeals filed against
block assessments completed under the Income Tax Act, allowed the
appeals. In fact, Government Pleader has relied on Annexure-D
produced in S.T. Rev. No.12/2010 which is a three Member Order
issued by the very same Bench in another company’s case(of the same
group) remanding the matter to the Assessing Officer holding that the
matter has to be reconsidered after the Income Tax Appellate Tribunal
disposes of appeal filed against order of the C.I.T.(Appeals) relied on
by the Tribunal. Review Petition filed by the department before the
Tribunal was also turned down.
2. After hearing both sides and after going through the Tribunal’s
order, we find that the Tribunal has heavily relied on the order of the
C.I.T.(Appeals) cancelling the block assessment of the assessee
completed under Section 158BC of the Act. In our view, the Tribunal
was not justified in treating the order of the C.I.T.(Appeals) as final.
Since it is a fact finding authority, it is upto the Income Tax Appellate
Tribunal to consider whether the C.I.T.(Appeals)’s order deserves to be
S.T. Rev. 12&19/2010 3
modified or reversed. Therefore, we feel the right course that the Sales
Tax Appellate Tribunal should have adopted was to remand this matter
to the Assessing Officer to wait for finality to be achieved in the
Income Tax block assessment through orders of the Tribunal as was
done in the case of another company of the same group vide Annexure-
D order produced in S.T. Rev. No.12/2010. We, therefore, allow the
S.T. Revision cases by setting aside the orders of the Tribunal and with
direction to the Assessing Officer to take up the matter afresh based on
final orders of the Tribunal issued in the Income Tax appeals. We
make it clear that fresh orders of assessment if any should be made
considering findings of the Income Tax Tribunal also and after giving
sufficient opportunity to the assessee.
C.N.RAMACHANDRAN NAIR
Judge
P.S.GOPINATHAN
Judge
pms
