2011 (3) TMI 1533 - HC - VAT and Sales Tax

Whether the Appellate Tribunal is right in stating that the Appellate Assistant Commissioner has sustained the turnover of slip No. 1 and therefore ought not to have allowed the turnover pertaining to other slips as all the slips were recovered at the same time of inspection? Whether the Appellate Tribunal is justified in sustaining the assessment order based on the findings which were neither available at the time of inspection nor at the time of assessment? Held that - A perusal of the order of the appellate authority shows that no material was there to substantiate the contentions that the entries with reference to the transactions referred to therein, did not relate to the assessee. It must be noted that inspections revealed stock variation of 466.995 kgs. Going by the slips and the stock difference noted, it is very difficult for us to accept the case of the assessee that the order of the Tribunal is unsustainable. In the circumstances, we have no hesitation in confirming the order of the Tribunal. Accordingly, the appeal stands dismissed.

Summary

Issues:
1. Interpretation of substantial questions of law regarding turnover of slips during inspection.
2. Justification of sustaining assessment order based on findings not available at the time of inspection.

Analysis:
1. The case involved the interpretation of substantial questions of law related to the turnover of slips discovered during an inspection at the business premises. The Appellate Tribunal questioned the justification of allowing turnover pertaining to multiple slips recovered simultaneously during inspection. The Appellate Assistant Commissioner confirmed the addition of slip No. 1 while deleting additions related to other slips, emphasizing that some slips were related to cash transactions or material issues accounted for in the books of accounts. The Tribunal set aside the Appellate Assistant Commissioner's order, directing the assessing authority to reassess the deleted turnover. The High Court upheld the Tribunal's decision, emphasizing that the Appellate Assistant Commissioner's reasoning lacked material to substantiate the contentions made by the assessee regarding the other slips.

2. The second issue revolved around the justification of sustaining the assessment order based on findings not available at the time of inspection. The assessee contended that certain slips recovered did not relate to purchase or sale transactions, but the assessing authority rejected the objection and confirmed the proposed additions. The Appellate Assistant Commissioner and the Tribunal disagreed on the treatment of various slips, with the Tribunal highlighting that the explanation offered by the assessee was an afterthought and not presented during the initial enquiry or before the assessing authority. The High Court agreed with the Tribunal's decision, emphasizing that the discrepancies in stock and the nature of entries in the slips made it difficult to accept the assessee's contentions, ultimately confirming the Tribunal's order and dismissing the appeal without costs.