Lakshmi Electricals vs State of Tamil Nadu

P.P.S. Janarthana Raja, J.—The above tax case revision is filed by the assessee against the order of the Tamil Nadu Sales Tax Appellate

Tribunal made in T.A. No. 713 of 1997, dated November 6, 1998.

The brief facts of the tax case revision are as follows:

The relevant assessment year is 1993-94. The assessee is a dealer in electrical goods and they reported a total and taxable turnover of Rs.

58,25,750.14 and Rs. 2,15,320.70, respectively, under the Tamil Nadu General Sales Tax Act, 1959. The assessing officer verified the accounts

and completed the assessment and determined the total and taxable turnover ot Rs. 56,59,071 and Rs. 4,90,797, respectively, and also levied the

penalty. Aggrieved by that order, the assessee filed an appeal before the Appellate Assistant Commissioner (CT) I, Chennai. The Appellate

Assistant Commissioner allowed the appeal partly and also remanded the matter back to the assessing officer. Aggrieved by that, the assessee filed

the second appeal before the Tamil Nadu Sales Tax Appellate Tribunal. The Appellate Tribunal confirmed the suppression and also confirmed the

penalty in respect of the turnover of Rs. 71,775. Aggrieved by that order, the assessee filed the present tax case revision. Originally, the revision

was filed before the Taxation Tribunal and later transferred and it is renumbered.

The learned Counsel appearing for the assessee submitted that the order of the Tribunal is illegal, without basis and further submitted that the

Tribunal has erred in sustaining the alleged estimated turnover on the ground that the purchase bills were raised much after the date of delivery

challans. The assessee did not suppress any turnover as it was explained before the enforcement wing officers that the alleged goods were received

through delivery challans. It is also submitted that the Tribunal is also wrong in levying the penalty u/s 12(3)(b) of the Act. Hence, the order passed

by the Tribunal is liable to be set aside.

The learned Special Government Pleader (Taxes) appearing for the Revenue submits that the Tribunal has considered all the facts and

circumstances of the case, rightly confirmed the addition made by the lower authorities. Therefore, the findings given by the Tribunal are based on

material facts. Hence, the order passed is in accordance with law and the same shall be confirmed.

Heard the learned Counsel appearing for the assessee as well as the learned Special Government Pleader (Taxes) appearing for the Revenue

and also perused the materials available on record.

The issue here is that there is suppression of the turnover. The Tribunal has considered the matter in detail and confirmed the order relating to

sales suppression. In paragraphs 6 and 7 of the order of the Tribunal, the reasons stated therein are as follows :

At the time of inspection on December 7, 1993, the inspecting officers have noticed that the day book was written up to December 4, 1993 and

the cash balance was not struck from May 3, 1993. Besides, the appellant has not maintained the stock account for the purchases made from

outside the State as required under Rule 26(9), In the absence of stock account, the inspecting officers had no other go except to verify the

correctness of the stock held at the time of inspection, with reference to a value based trading a account, taking into consideration the opening as

on April 1, 1993 and the purchases and sales from April 1, 1993 to December 7, 1993. Such verification revealed an excess stock of Rs. 50,546.

The inspecting officers have adopted the overall gross profit of 42 per cent as was revealed from the books of accounts for the previous year

1992-93. The explanation that the appellant had purchased the goods under the cover of delivery challan and the connected purchase bills were

received subsequently, is not acceptable as the purchase bills were raised long after the raising of delivery challan. For example, for delivery

challans dated November 9, 1993 and December 3, 1993, the corresponding purchase bills were raised on March 7,1994. For the delivery

challans dated October 30, 1993 and November 24, 1993, the purchase bill was raised on December 8, 1993. Similarly, for the delivery challans

dated November 25, 1993 and December 2, 1993, the purchase bill was raised on December 11, 1993. But for the inspection by the

enforcement wing officers, the excess stock noticed at the time of inspection could have gone unnoticed and the turnover as per books of accounts

might have been accepted. In such a circumstances, the actual sales suppression of Rs. 71,775 arrived at by adding 42 per cent gross profit to the

purchase value of excess stock of Rs. 50,546 does not call for interference.

The levy of corresponding penalty and the appropriate rate u/s 12(3)(b) of the Tamil Nadu General Sales Tax Act, in respect of the turnover of

Rs. 71,775 brought to assessment stands confirmed.

On going through the above order, we find that the Tribunal has considered all the facts and circumstances of the case and rendered a factual

finding. It is a question of fact. It is not a perverse order. The Counsel for the assessee is also unable to bring any fresh materials and convince

before us to take a contrary view of the Tribunal. We do not find any illegality or irregularity in the order passed by the Tribunal.

Under these circumstances, the order passed by the Tribunal is confirmed. Accordingly, the tax case revision is dismissed.