1992 (7) TMI 327 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of turnover and penalty imposition based on defects noticed by the assessing officer.
2. Appeal against the assessment and penalty before the Appellate Assistant Commissioner.
3. Suo motu revision under section 34 of the Tamil Nadu General Sales Tax Act by the Joint Commissioner.
4. Challenge of the revisional authority's order before the High Court.

Analysis:

1. The assessing officer assessed the appellant's turnover for the assessment year 1977-78 based on certain defects noticed in the accounts, leading to an estimated turnover with an additional penalty. The grounds for estimation included discrepancies in gross profit, outturn under various categories, and stock discrepancies in black gram dhall and dust. The assessing officer added 7½% towards possible omission and imposed a penalty.

2. On appeal, the Appellate Assistant Commissioner acknowledged the discrepancies in stock but disagreed with the 7½% addition, instead adding an ad hoc amount of Rs. 3,000. The penalty aspect of the order was affirmed. However, a suo motu revision under section 34 was initiated, focusing on the stock shortage detected during a subsequent inspection. The Joint Commissioner upheld the assessing officer's addition, citing a reasonable nexus to the facts and the appellant's objections were considered.

3. The appellant's counsel argued that the revision by the Joint Commissioner under section 34 was done casually and without basis, emphasizing that the alleged excess stock related to production commodities. The Additional Government Pleader failed to defend the revisional authority's orders adequately, leading to the contention that the interference was unjustified.

4. The High Court, after considering the arguments, found it necessary to interfere with the revisional authority's order under section 34. The Court criticized the reasoning behind the Joint Commissioner's decision and emphasized the need for judicial discretion in such matters. Citing precedents, the Court highlighted that the Board of Revenue should not interfere arbitrarily with the orders of lower authorities unless there is a clear discrepancy. Consequently, the High Court set aside the revisional authority's order and restored the Appellate Assistant Commissioner's decision, allowing the appeal with no costs incurred.