1996 (10) TMI 451 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of sales turnover and irregularities in a rice mill business under the Kerala General Sales Tax Act, 1963 for the assessment year 1984-85.

Analysis:
The revision petitioner, a rice mill operator, faced an assessment for the year 1984-85 revealing unaccounted sales of rice and other discrepancies during an inspection. The Sales Tax Officer based the assessment on estimated purchase turnover, leading to a total taxable turnover of Rs. 29,32,762.68. The first appellate authority upheld the rejection of accounts due to substantial grounds, supporting the Sales Tax Officer's decision.

The first appellate authority acknowledged the irregularities but deemed the addition of cent per cent excessive, suggesting a 50 per cent addition to the conceded turnover. Despite this, the order was interfered with, leading to the matter being taken up before the Kerala Sales Tax Appellate Tribunal.

The Tribunal, as the second appellate authority, intervened based on the exercise of discretion. It noted that the first appellate authority failed to consider the Inspection Officer's findings adequately, leading to a restoration of the Sales Tax Officer's order. The Tribunal emphasized the need for a reasoned approach in exercising discretion and cautioned against capricious decisions.

The High Court found that the Tribunal's interference was unwarranted, as the first appellate authority's discretion was not deemed capricious. The Court emphasized that unless the use of discretion was clearly erroneous, interference would be improper. Consequently, the Court allowed the petition, quashed the Tribunal's order, and directed the Sales Tax Officer to act in accordance with the restored order from February 20, 1989.