1993 (6) TMI 234 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity and sustainability of levy of tax under section 5A
2. Enforceability and workability of section 5A based on rules framed
3. Justification of addition made to purchase and sales turnover
4. Maintainability of revisions due to questions not raised before Appellate Tribunal

Analysis:

Validity of Tax Levy under Section 5A:
The judgment involved three revisions filed by two different assessees challenging orders passed by the Sales Tax Appellate Tribunal under the Kerala General Sales Tax Act, 1963. The primary issue in all three cases was the validity and sustainability of the levy of tax under section 5A on the petitioners. The Tribunal had confirmed additions to the purchase turnover and sales turnover, leading to the challenges by the assessees.

Enforceability of Section 5A:
Another critical issue raised was the enforceability and workability of section 5A based on rules framed in 1963, despite the section being inserted only from April 1, 1970. This raised questions regarding the retrospective application and compliance with the legal framework.

Justification of Additions to Turnover:
The assessees contended that the Tribunal was not justified in confirming the additions made to the purchase turnover and sales turnover. The judgments detailed surprise inspections revealing substantial suppressions, leading to the rejection of accounts and best judgment assessments by the Tribunal. The Tribunal upheld the additions based on the findings of suppression and irregularities in the accounts.

Maintainability of Revisions:
A preliminary objection was raised regarding the maintainability of the revisions, arguing that the questions raised in the revisions were never argued before the Sales Tax Appellate Tribunal. The Court held that since the questions were not raised or adjudicated by the Tribunal, the revisions were incompetent under section 41 of the Kerala General Sales Tax Act. Consequently, the revisions were dismissed on this ground.

Merits of the Cases:
On the merits, the Court found that the Appellate Tribunal had sufficient evidence to reject the accounts and uphold the best judgment assessments. The judgments highlighted the substantial suppressions and irregularities found during inspections, leading to the Tribunal's decision to sustain the additions made by the lower authorities. The Court concluded that there was no error of law in the Tribunal's orders, leading to the dismissal of all three tax revision cases.

In conclusion, the Court dismissed all three petitions, upholding the decisions of the Sales Tax Appellate Tribunal and emphasizing the sufficiency of evidence supporting the best judgment assessments made by the authorities.