1996 (10) TMI 469 - HC - VAT and Sales Tax

Summary

Issues: Assessment of taxable turnover, rejection of accounts, determination of additions, refixing of additions, levy of turnover tax.

Assessment of Taxable Turnover:
The assessee, M/s. Kodoor Engineers (P) Ltd., approached the court for tax revision cases for the assessment years 1987-88, 1988-89, and 1989-90. The reported total and taxable turnover for these years were provided. The accounts were rejected, and the taxable turnover was estimated, with additions made for suppression of sales in manufactured polythene pipes and taxable turnover under section 5A of the Act. The assessing authority determined percentages of additions, which were later reduced by the Deputy Commissioner (Appeals) and the Kerala Sales Tax Appellate Tribunal.

Rejection of Accounts and Determination of Additions:
The assessing authority rejected the accounts maintained by the assessee, referring to the approximate raw material requirement furnished by the assessee. The Tribunal upheld the estimated additions made by the assessing authority, emphasizing that the assessing officer had used judicial discretion in fixing the additions. The Tribunal found it difficult to justify the revision of additions under the limited powers of the Kerala General Sales Tax Act, 1963.

Refixing of Additions:
The controversy before the Deputy Commissioner (Appeals) and the Tribunal revolved around the refixing of additions. The percentage of additions was reduced in subsequent proceedings, showing a proportionate reduction concerning the purchase turnover under section 5A of the Act.

Levy of Turnover Tax:
The learned counsel argued against the levy of turnover tax on the amount of tax collected, citing a previous judgment clarifying the term "turnover." The Court ruled that turnover tax cannot be levied on the turnover that includes sales tax collected on it. The Tribunal's decision to levy turnover tax on the amount of tax collected was quashed and set aside, as it was not considered justified in law. The revision cases partly succeeded in this context, with the directions to levy and recover turnover tax on the tax collected being quashed and set aside.

This judgment addresses various issues related to the assessment of taxable turnover, rejection of accounts, determination and refixing of additions, and the levy of turnover tax. It provides insights into the judicial discretion exercised in fixing additions and clarifies the legal position regarding the levy of turnover tax on the amount of tax collected.