1991 (10) TMI 285 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of suppressed turnover and penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959.
2. Contention regarding affidavits filed by agriculturists to explain discrepancies in the accounts.
3. Evaluation of the credibility of the explanations provided by the assessees regarding the discrepancies found during inspection.

Detailed Analysis:
1. The appellants, dealers in tamarind, jaggery, and grams, reported a total and taxable turnover for the assessment year 1976-77. Discrepancies were discovered during the examination of accounts, leading to the addition of a suppressed turnover amounting to Rs. 20,115. The appellate authority upheld a portion of the addition based on recovered slips but deleted the rest along with the penalty. In suo motu proceedings, the Joint Commissioner reinstated the assessing authority's order, prompting the appeal against this decision.

2. The appellants contended that affidavits from agriculturists supported their claim that goods were sent under specific names, explaining the discrepancies in the slips recovered during inspection. The slips indicated purchases of tamarind under different names, with the appellants arguing that the entries were based on promised quantities not fully delivered. The appellate authority accepted this explanation for certain entries but not for others, leading to the deletion of a portion of the turnover. However, the Joint Commissioner rejected this explanation as an afterthought, considering it unreliable due to its timing and lack of correlation with the account books.

3. The court examined the affidavits submitted by agriculturists and found discrepancies in the explanations provided by the assessees regarding the entries in the slips of paper. The court noted the delayed submission of the affidavits and the lack of immediate clarification after the inspection, casting doubt on the credibility of the appellants' claims. It was concluded that the appellants' attempt to align the entries in the slips with their accounts was a strategy to evade a proper assessment. Consequently, the court upheld the Joint Commissioner's decision to reinstate the assessing authority's order, emphasizing that once suppression was established, the penalty on the suppressed turnover should not be deleted.

In conclusion, the appeal was dismissed, affirming the reinstatement of the assessing authority's order by the Joint Commissioner.