1972 (10) TMI 105 - HC - VAT and Sales Tax

Summary

Issues: Assessment based on information from customs department, revision of original assessment, exclusion of turnover by Appellate Assistant Commissioner, Board of Revenue's suo motu power, liability of the assessee as a second seller, penalty imposition, power of Board of Revenue to enhance penalty.

Analysis:
The case involved the assessment of an assessee who was a dealer in arecanuts and spices. The assessing authority revised the original assessment based on information from the customs department, which revealed that the assessee had purchased goods at auction sales not accounted for in the regular accounts. The Appellate Assistant Commissioner deleted certain turnovers from the revised taxable turnover and reduced the penalty. However, the Board of Revenue, exercising its suo motu power, added back a turnover amount and imposed a higher penalty, challenging the exclusion of turnover by the Appellate Assistant Commissioner.

Regarding the turnover exclusion by the Appellate Assistant Commissioner, the Board of Revenue held that the assessee, being a second seller, was liable to pay tax and had not proven that the customs department had collected sales tax on the transactions. The Board added back the turnover to the taxable turnover and imposed an additional penalty. The court agreed with the Board's decision, stating that the assessee could not escape liability for tax payment based on the grounds presented.

On the issue of penalty imposition, the court considered the non-disclosure of turnover at the original assessment stage. The assessee had failed to disclose purchases from the customs department initially, claiming later that the purchases were made for another dealer. However, it was found that the purchases were for the assessee's benefit. The court upheld the penalty imposed by the assessing authority under section 16(2), stating that the Board of Revenue had the power to modify the penalty amount in its revisional jurisdiction based on the enhanced turnover.

In conclusion, the court dismissed the tax case, upholding the decisions of the assessing authority and the Board of Revenue. The assessee was held liable for the tax and penalty as determined by the authorities.