2013 (11) TMI 460 - HC - VAT and Sales Tax

Non maintenance of books of accounts - Penalty u/s 12(3) - Held that -assessee, having brought into account subsequent to the inspection of the variation in the stock, the addition made by the Assessing Officer, namely, twice the actual variation, is unwarranted. The Appellate Assistant Commissioner made an addition of actual suppression, holding that the same would be adequate towards probable omission - Appellate Assistant Commissioner is just and proper and the Joint Commissioner has re-fixed the turnover only for the purpose of bringing the taxable turnover above ₹ 10 lakhs, in order to attract additional sales tax - Decided in favour of assessee.

Summary

Issues:
1. Assessment year 1990-91 appeal against Joint Commissioner's order.
2. Stock variation and failure to maintain production-cum-stock account.
3. Best judgment assessment, taxable turnover determination, and penalty imposition.
4. Appeal to Appellate Assistant Commissioner and subsequent Suo Motu Revision by Joint Commissioner.
5. Dispute over the addition made by Assessing Officer and re-fixing of turnover by Joint Commissioner.
6. Justification of Appellate Assistant Commissioner's decision and setting aside Joint Commissioner's order.

Analysis:
1. The appellant challenged the Joint Commissioner's order regarding the assessment year 1990-91. The Enforcement Wing Officers found a stock variation of Rs. 7,605 and non-maintenance of production-cum-stock account during an inspection at the assessee's place of business. Consequently, the Assessing Officer conducted a best judgment assessment, determining a taxable turnover of Rs. 10,14,628 and imposing a penalty under Section 12(3) of the Tamil Nadu General Sales Tax Act.

2. The appellant appealed to the Appellate Assistant Commissioner, who considered the addition made by the Assessing Officer as actual suppression and found it adequate as the variation was later accounted for by the assessee. The Appellate Assistant Commissioner granted relief on a turnover of Rs. 15,000 at 3%. However, the Joint Commissioner, through Suo Motu Revision, made an equal addition towards probable omission, increasing the turnover to exceed Rs. 10 lakhs.

3. Upon review, the High Court observed that the Appellate Assistant Commissioner's decision was justified, as the subsequent accounting by the assessee rendered the Assessing Officer's addition unwarranted. The High Court agreed with the Appellate Assistant Commissioner's assessment of actual suppression being sufficient towards probable omission, thus finding the Joint Commissioner's re-fixing of turnover solely to increase taxable turnover above Rs. 10 lakhs for additional sales tax as unjustified.

4. Conclusively, the High Court deemed the equal addition proposed by the Appellate Assistant Commissioner as just and reasonable, considering the subsequent accounting adjustments. Consequently, the Tax Case Appeal filed by the assessee was allowed, and the Joint Commissioner's order was set aside, with no costs imposed.