2001 (4) TMI 896 - AT - VAT and Sales Tax

Summary

Issues:
1. Allocation of suppressed turnover in the ratio of 50:50 by the Appellate Tribunal.
2. Deletion of penalty of 50% of tax due on actual suppression by the Appellate Assistant Commissioner.

Issue 1: Allocation of suppressed turnover in the ratio of 50:50 by the Appellate Tribunal.
The case involved a tax revision case against the order of the Sales Tax Appellate Tribunal regarding the allocation of suppressed turnover of Rs. 3,75,180 in grams found during inspection. The Enforcement Wing Officers recovered records revealing sales of grams without corresponding sale bills, leading to the determination of suppressed turnover. The Appellate Assistant Commissioner confirmed the suppression but deleted the addition made on the taxable turnover. The Appellate Tribunal, while justifying the suppression amount, allocated it in a 50:50 ratio based on the nature of goods and lack of evidence to prove tax sufferance. However, the Tribunal found this allocation unjustified as the circumstances did not align with the precedent relied upon, leading to the restoration of the Appellate Assistant Commissioner's order.

Issue 2: Deletion of penalty of 50% of tax due on actual suppression by the Appellate Assistant Commissioner.
Regarding the penalty, the Appellate Tribunal observed that the inability to explain transactions should not be the sole basis for imposing a penalty. Citing a previous decision, the Tribunal deleted the penalty of 50% of tax on the suppression. However, the Tribunal found this deletion unwarranted as the records clearly established suppression and the inability to correlate transactions with regular books of accounts, leading to the restoration of the penalty imposed by the Appellate Assistant Commissioner. The Tribunal emphasized that the circumstances did not justify the deletion of the penalty and reinstated the original penalty amount.

In conclusion, the Tribunal set aside the Appellate Tribunal's order and restored the Appellate Assistant Commissioner's decision on both the allocation of suppressed turnover and the penalty, ultimately allowing the tax revision case filed by the Revenue.