2010 (10) TMI 939 - HC - VAT and Sales Tax

When Form XX-B is primarily issued to the registered dealer even though the declaration relating to the quantum of the purchase made is to be made by the farmer, it was the primary responsibility of the dealer to have ensured that what was purchased was duly reflected in Form XX-B declaration and since the petitioner has failed to fulfil the said statutory obligation, the revision made and the equal value addition as well as the penalty imposed cannot be interfered with? Held that - If really such corrections were made as contended by the petitioner by the farmers themselves in Form XX-B declarations, that should have been ensured by the petitioner at the time of purchase itself by atleast getting necessary initials of the concerned farmer in Form XX-B declaration itself in order to rule out the possibility of any other allegations of such corrections said to have bee made by the petitioner/assessee at a later point of time. Therefore, in the absence of any other acceptable material, the revision of the taxable turnover made based on such corrections found in Form XX-B declaration at the instance of the respondent cannot be faulted. We are not therefore, inclined to interfere with the addition of suppressed value of turnover to the extent of ₹ 1,28,466/- made by the Assessing Authority and confirmed by the Lower Appellate Authority as well as the Tribunal. The revision petition therefore stands partly allowed and while sustaining the revision of the taxable turnover based on suppression to the tune of ₹ 1,28,466/-, the imposition of penalty as well as equal addition stand deleted

Summary

Issues:
1. Revision of assessment for the assessment year 1988-89 based on discrepancies in Form XX-B declarations.
2. Justifiability of revising taxable turnover, adding suppressed value, and levying penalty on the petitioner.
3. Interpretation of responsibilities of the dealer and the agriculturist in Form XX-B declarations.

Analysis:

Issue 1: Revision of assessment based on discrepancies in Form XX-B declarations
The petitioner, a dealer in groundnut and Groundnut Kernel, reported its taxable turnover for the assessment year 1988-89. Subsequently, discrepancies were found in Form XX-B declarations during an inspection, leading to a notice for revising the assessment. A revised order of assessment was passed, adding the alleged suppression of purchase of 14 bags of groundnut valued at Rs.1,28,466. The petitioner challenged this revision, arguing against the equal value addition and penalty imposed.

Issue 2: Justifiability of revising taxable turnover and levying penalty
The petitioner contended that the tax liability should be at the point of purchase and that the corrections in Form XX-B declarations should not lead to an equal value addition and penalty. The court acknowledged the responsibility of the dealer to ensure accuracy in the declarations made by the agriculturists supplying the goods. The revision of taxable turnover based on the corrections in Form XX-B declarations was upheld, as the petitioner failed to explain the discrepancies at the time of purchase.

Issue 3: Interpretation of responsibilities in Form XX-B declarations
The court analyzed the dual responsibilities of the dealer and the agriculturist in Form XX-B declarations. While the dealer is responsible for the initial declaration, the agriculturist must provide details regarding the quantity and nature of goods supplied. The court held that any defect in the quantity supplied cannot solely be attributed to the dealer, emphasizing the need for cooperation between both parties in ensuring accurate declarations. Consequently, the court found the equal addition and penalty imposed on the petitioner unjustified.

In conclusion, the revision petition was partly allowed, sustaining the revision of taxable turnover based on suppression but deleting the imposition of penalty and equal addition.