1980 (11) TMI 142 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of sales tax under the Kerala General Sales Tax Act for the years 1971-72 and 1972-73.
2. Rejection of accounts by assessing authority and estimation of taxable turnover.
3. Contention regarding the tax rate applicable to purchase turnover of old gold ornaments.
4. Appeals before the Sales Tax Appellate Tribunal.
5. Validity of rejection of accounts and determination of taxable turnover for the years in question.
6. Interpretation of item No. 56 of the First Schedule to the Act.
7. Revision petitions filed by the State challenging the Tribunal's decision on the tax rate for old gold ornaments.
8. Contention raised by the assessee regarding rejection of accounts for the year 1972-73.
9. Reasonableness of the estimate made by the assessing authority for taxable turnover.

Analysis:
The judgment of the Kerala High Court involved three tax revision cases arising from sales tax assessments for the years 1971-72 and 1972-73. The assessing authority had rejected the accounts of the assessee, who was engaged in the jewellery business, and estimated the taxable turnover based on the running stock. The Appellate Assistant Commissioner modified the estimated turnover, but the assessee contended that the purchase turnover of old gold ornaments should be taxed at a lower rate under item No. 56 of the First Schedule to the Act. The Sales Tax Appellate Tribunal upheld the assessee's contentions for the assessment year 1971-72, applying a concessional rate of 1 per cent. However, for 1972-73, the Tribunal agreed with the rejection of accounts and the estimate made by the assessing authority, leading to different outcomes for each year.

In the revision petitions, the State challenged the Tribunal's decision on the tax rate for old gold ornaments. The State argued that the Supreme Court had reversed a previous decision, stating that the purchase of old gold ornaments did not fall under the concessional rate. The assessee, acknowledging the Supreme Court's decision, could no longer support the Tribunal's view. Consequently, the State's revision petitions were allowed.

Regarding the assessee's contention in one of the cases, the Court found no justification to interfere with the rejection of accounts and the estimate of taxable turnover for the year 1972-73. The Court agreed with the Tribunal's decision on the reasonableness of the assessing authority's estimate based on the running stock, emphasizing that it was a proper method considering the circumstances. Therefore, the Court dismissed the assessee's petition.

In conclusion, the Court dismissed one petition while allowing the State's revision petitions, directing the taxable turnover of old gold ornaments to be taxed at the general rate. The parties were instructed to bear their respective costs in all cases.