1996 (6) TMI 310 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to Kerala general sales tax assessment.
2. Addition to taxable turnover based on assessment.
3. Rejection of books of accounts due to various discrepancies.
4. Appeal to first appellate authority.
5. Tribunal's decision on rejection of accounts and addition to turnover.
6. Revision before the High Court challenging Tribunal's decision.

Analysis:
The case involved two appeals before the Kerala Sales Tax Appellate Tribunal, one under Kerala general sales tax assessment and the other under Central sales tax assessment for the year 1985-86. The revision case specifically related to the Kerala general sales tax assessment, as the assessment under Central sales tax was not challenged and had become final.

The assessing authority had made additions to the conceded taxable turnover and estimated additions to the sales tax turnover based on discrepancies found in the books of accounts. The trial authority found the books unacceptable due to differences in turnover, a fall in turnover compared to the previous year, and the absence of a manufacturing account, among other reasons.

Subsequently, a notice was issued under section 17(3) of the Kerala General Sales Tax Act proposing taxable turnover amounts. The objections filed were considered, but the trial authority upheld the additions due to the non-maintenance of manufacturing accounts and unsatisfactory explanations provided.

The matter was appealed to the first appellate authority, which also upheld the additions, emphasizing the lack of manufacturing accounts and supporting bills for purchases.

The Sales Tax Appellate Tribunal justified the rejection of the accounts, emphasizing the relevance of manufacturing accounts, especially in the furniture section. The Tribunal modified the addition to the taxable turnover under furniture from 70% to 50%.

The High Court dismissed the revision case challenging the Tribunal's decision. The Court held that the consistent view of the authorities was that manufacturing accounts were not maintained, specifically for furniture production, justifying the proposed estimated turnover. The Court found no error in the exercise of powers under section 17 of the Kerala General Sales Tax Act and dismissed the revision case at the stage of admission.