Vijayaranga Trading Co. vs State of Tamil Nadu

K. Ravichandrabaabu, J.—The assessee is on appeal in respect of the assessment year 1990-91. The appeal is preferred against the order

of the Joint Commissioner, made in his suo motu revision against the order of the Appellate Assistant Commissioner. The place of business of the

assessee was inspected by the Enforcement Wing Officers on January 7, 1991 and a stock variation to the tune of Rs. 7,605 was found. It was

also found that the assessee had not maintained the production-cum-stock account for oil and oil-cake. The assessing officer, taking note of the

above defects, resorted to best judgment assessment and determined the taxable turnover of Rs. 10,14,628, besides levying penalty of Rs. 232 u/s

12(3) of the Tamil Nadu General Sales Tax Act.

Aggrieved against the said order of the assessing officer, the assessee preferred an appeal before the Appellate Assistant Commissioner. The

first appellate authority found that the addition made as actual suppression was adequate, since the variation noticed during inspection was

subsequently accounted in the accounts of the assessee. As such, the first appellate authority found that the addition made by the assessing officer

amounting to two times, was not warranted. The Appellate Assistant Commissioner found that the addition made in respect of actual suppression is

sufficient and consequently held that the assessee was entitled to the relief on the turnover of Rs. 15,000 at three per cent. The said order of the

Appellate Assistant Commissioner was taken by way of suo motu revision by the Joint Commissioner, who, in turn, after considering the various

factors, found that an equal addition towards probable omission would be reasonable and accordingly, the Joint Commissioner re-fixed the

turnover so as to bring the same above Rs. 10 lakhs. Thus, the Joint Commissioner made an equal addition of Rs. 7,500 apart from the stock

variation at Rs. 7,500. Challenging the said order, the assessee is on revision before us.

From the perusal of the orders passed by the authorities below, we find that the first appellate authority, namely, the Appellate Assistant

Commissioner, is justified in holding that the assessee, having brought into account subsequent to the inspection of the variation in the stock, the

addition made by the assessing officer, namely, twice the actual variation, is unwarranted. The Appellate Assistant Commissioner made an addition

of actual suppression, holding that the same would be adequate towards probable omission.

We find that the reasoning of the Appellate Assistant Commissioner is just and proper and the Joint Commissioner has re-fixed the turnover only

for the purpose of bringing the taxable turnover above Rs. 10 lakhs, in order to attract additional sales tax. As we have already found that only an

equal addition, as has been held by the first appellate authority, is just and reasonable, taking note of the subsequent accounting, we do not find any

valid ground to sustain the order of the Joint Commissioner. Accordingly, the tax case appeal filed by the assessee stands allowed and the order of

the Joint Commissioner stands set aside. No costs.