1995 (7) TMI 415 - HC - VAT and Sales Tax

Summary

Issues:
Tax revision cases under the Kerala General Sales Tax Act, 1963 for assessment years 1984-85 and 1985-86; Conflict between previous court decisions; Assessment orders passed under best judgment assessment; Dispute regarding additions in turnovers for arrack and foreign liquor; Burden of proof on the dealer for tax liability; Unaccounted purchases and sales detected during inspections; Applicability of previous court decisions on current case; Tribunal's interference with Appellate Assistant Commissioner's order; Validity of additions made by assessing authority; Justification of additions in sales turnover; Exemption on second sale of arrack and foreign liquor; Tribunal's decision upheld.

Analysis:
The tax revision cases before the Kerala High Court involved disputes arising from assessment orders under the Kerala General Sales Tax Act for the years 1984-85 and 1985-86. The cases were filed by a partnership firm, "Sreekrishna Trading Co.," engaged in the business of arrack and foreign liquor, challenging the common order of the Kerala Sales Tax Appellate Tribunal. The Tribunal allowed the appeal for the year 1984-85 in part and entirely for 1985-86, while dismissing the appeals filed by the assessee for the same years.

The main issues raised by the assessee pertained to the justification of additions in turnovers, rejection of accounts, and the interference by the Appellate Assistant Commissioner. The Tribunal's decision was based on shop inspection reports, which revealed unaccounted purchases and sales during the assessment years. The burden of proof regarding tax liability rested on the dealer, and in this case, the assessee failed to prove that the turnover from alleged unaccounted purchases was not taxable under the Act.

The Tribunal upheld the additions made by the assessing authority, considering the unaccounted purchases and sales established during inspections. The Tribunal's decision was supported by the records seized, showing discrepancies in stock and purchases. The Tribunal differentiated this case from previous judgments where only shortages were considered, emphasizing the unaccounted purchases in the present case.

Regarding the Tribunal's interference with the Appellate Assistant Commissioner's order, the Court held that the Tribunal had valid reasons for setting aside the order. The additions in sales turnover were deemed just and reasonable, considering the unaccounted transactions. The Court found no errors in the Tribunal's decision and upheld the additions made by the assessing authority.

In conclusion, the Court dismissed the tax revision cases, stating that the issues raised were primarily questions of fact decided by the Tribunal. The Tribunal's decision was upheld, and no costs were awarded in the matter.