2011 (6) TMI 720 - HC - VAT and Sales Tax

Levy of penalty - Held that - The Sales Tax Appellate Tribunal as a final fact finding body found that when the assessee had admitted the stock difference and the suppression and that the assessee failed to rewrite the stock difference, rightly the assessing officer treated the turnover as actual suppression. As regards equal addition the Tribunal confirmed the view of the Appellate Assistant Commissioner for equal addition. In the circumstances, the Tribunal confirmed the levy of penalty. As far as the assessment on actual suppression found is concerned, we do not find any good ground to accept the assessee s case. Merely because the assessee s explanation, as regards the subsequent accounting of the unaccounted purchase had been rejected by the officer, that by itself would not justify the equal time addition towards probable suppression. In the absence of any further material to substantiate that the assessee had been habitually indulging in suppressed transaction, we do not find any ground to substantiate further addition under the head of probable omission. In the circumstances, even though it is a revision, we are constrained to accept the case of the assessee on further addition made on equal time addition for probable omission. Tax case revision is partly allowed deleting the addition made under the head of probable addition which is equal to the actual suppression

Summary

Issues: Revision against Sales Tax Appellate Tribunal order for assessment year 1996-97; Unaccounted inter-State purchases; Best judgment assessment; Appeal before Appellate Assistant Commissioner; Penalty levy confirmation; Appeal before Tribunal; Revision challenging Tribunal's order.

The judgment involves a revision against the order of the Tamil Nadu Sales Tax Appellate Tribunal for the assessment year 1996-97. The petitioner's business premises were inspected, revealing unaccounted inter-State purchases and discrepancies in stock. The assessing officer made a best judgment assessment based on the actual suppression found. The assessee contended that the unaccounted purchases were subsequently recorded, but the officer found no proof of this. The Appellate Assistant Commissioner rejected the plea and confirmed the addition for probable omission. The Tribunal, considering the case merits, dismissed the appeal, leading to the present revision.

The petitioner argued that the Tribunal did not consider deleting the further addition. The High Court noted that while the actual suppression assessment was justified, the equal addition for probable omission required more substantial evidence. The Tribunal confirmed the penalty, considering the admitted stock difference and suppression. However, the Court found no grounds to support further addition for probable omission without evidence of habitual suppressed transactions. Consequently, the Court partly allowed the revision, deleting the addition equal to the actual suppression, without imposing costs.