2014 (2) TMI 341 - HC - VAT and Sales Tax

Rejection of books of accounts - Discrepancy in stock - Best judgment assessment - Suppression of stock - Suo motu revision - Held that - assessee was never in the business of selling beedi leaves. Further more, the assessee pointed out that never in the history of their business, they sold beedi leaves to the said dealer; merely because beedi leaves was available at the time of inspection, it could not have been presumed that there was sales suppression. It is the specific case of the assessee that explanation has been given to the Enforcement Wing Officers as well as the Assessing Officer. By reading of the assessment order dated 31.12.1993, it is seen that the Assessing Officer did not consider the same, but rejected it by stating that such explanation is not acceptable. The Assessing Officer being the authority is bound to consider the explanation given by the assessee and thereafter, pass a reasoned order either accepting or rejecting the explanation. Joint Commissioner, who exercised his suo motu revision has not considered the specific contention raised by the assessee that voucher No.35 was inadvertently prepared by the Stores Clerk, however, receipt of the above consignment was properly recorded in the Pass Register; that apart the specific plea raised by the assessee that they were never in the business of selling beedi leaves was also not considered - Decided in favour of assessee.

Issues:
1. Best judgment assessment under Tamil Nadu General Sales Tax Act, 1959 based on stock discrepancies.
2. Appeal before Appellate Assistant Commissioner regarding voucher discrepancies and suppression of sales.
3. Appellate Assistant Commissioner's decision in favor of the assessee, deleting the disputed turnover and penalty.
4. Exercise of suo motu revisional power by Joint Commissioner under Section 34 of TNGST Act.
5. Joint Commissioner's decision confirming revision, alleging afterthought by the assessee in explanation.
6. Discrepancies in the assessment order and rejection of the assessee's explanation by the Assessing Officer.
7. Failure of Joint Commissioner to consider specific contentions raised by the assessee.
8. Disagreement with Joint Commissioner's reasoning and restoration of the Appellate Assistant Commissioner's order.

Analysis:
1. The case involved a best judgment assessment under the Tamil Nadu General Sales Tax Act, 1959, due to stock discrepancies found during an inspection at the assessee's premises. The Assessing Officer made the assessment based on these discrepancies.

2. The assessee appealed before the Appellate Assistant Commissioner, explaining discrepancies in voucher preparation and asserting no sales suppression. The Appellate Assistant Commissioner accepted the assessee's explanations, deleted the disputed turnover, and set aside the penalty imposed under Section 12(3) of the Act.

3. Subsequently, the Joint Commissioner invoked suo motu revisional power under Section 34 of the TNGST Act, proposing to revise the Appellate Assistant Commissioner's order. The assessee reiterated its stand and submitted relevant documents before the Joint Commissioner.

4. The Joint Commissioner, in his order, dismissed the assessee's explanations as afterthought and confirmed the revision. The assessee challenged this decision through a Tax Case (Appeal) before the High Court.

5. The High Court disagreed with the Joint Commissioner's reasoning, noting that the specific contentions raised by the assessee were not adequately considered. The Court upheld the Appellate Assistant Commissioner's decision, setting aside the Joint Commissioner's order and restoring the original assessment order in favor of the assessee.

This comprehensive analysis outlines the issues, the sequence of events, and the judicial decisions made at each stage of the case, providing a detailed understanding of the legal judgment.

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