2007 (9) TMI 593 - HC - VAT and Sales Tax

Whether the total addition based on stock variation noticed at the time of inspection can be sustained? Whether the levy of penalty is warranted? Held that - In the hierarchy of adjudication of disputes under the statute, Tribunal is the last fact-finding authority and finding of facts can be interfered with only when they are not supported by any material on record or they are otherwise perverse. This court in State of Tamil Nadu v. Krishna Oil Mills reported in 1998 (2) TMI 580 - MADRAS HIGH COURT held that when the findings of the Tribunal are not based on the material facts and if it is perverse, to avoid travesty of justice, the court can interfere in revision. In the case on hand, the Tribunal has recorded its findings on the basis of material facts and also considered the various contentions raised by the dealer before the appellate authority. Thus see no perversity in the finding. Therefore, as rightly held by all the three authorities, levy of tax on the turnover suppressed by the assessee, equal time addition and penalty, do not call for any interference. Hence, the writ petition is dismissed. No costs.

Summary

Issues:
Challenge to Sales Tax Appellate Tribunal's order as illegal and invalid.

Analysis:
The petitioner, a timber dealer, reported a total and taxable turnover for 1992-93. An inspection revealed a stock discrepancy, leading to reassessment and penalty imposition. The Appellate Assistant Commissioner dismissed the appeal, upholding the suppression finding. The petitioner's subsequent appeal to the Sales Tax Appellate Tribunal was dismissed on the grounds of failure to prove accurate accounts. The petitioner contended that accepting only favorable findings is unjust. The petitioner further argued against equal-time addition and penalty imposition, citing relevant case laws.

The High Court noted discrepancies in the opening stock reported by the petitioner, leading to suppressed turnover findings. The court emphasized the importance of accurate stock reporting and rejected the petitioner's argument against suppression. The court distinguished a previous case where equal-time addition was deleted due to unjustified stock discrepancies, highlighting the deliberate suppression in the current case.

The court upheld the suppression finding, emphasizing the petitioner's failure to substantiate accurate accounts. Best judgment assessment was deemed reasonable due to contradictions in reported figures. The court rejected the petitioner's reliance on case laws, emphasizing the deliberate suppression in the current case. The court justified the equal-time addition and penalty imposition based on the deliberate suppression of factual figures by the petitioner.

The court rejected the notion of a mere change of opinion in reassessment, emphasizing the evidence of suppression unearthed during inspection. The court cited a tax case to highlight the importance of consistency in assessing similar facts. The court affirmed the Tribunal's findings as fact-based and non-perverse, dismissing the writ petition. The court upheld the tax levy, equal-time addition, and penalty imposition, concluding no interference was warranted.