2014 (2) TMI 415 - HC - VAT and Sales Tax

Approbation or reprobation of a sworn statement - Held that - There is no provision under the TNGST Act to enable the authority under the Act to adopt any other procedure followed by the Central Excise Department. In the absence of any enquiry conducted by the authority under the TNGST, in our view, the Revenue has not done its duty in a proper manner. Therefore, the question of approbation and reprobation does not arise - Decided against Revenue. Valuation of goods - Discrepancy in stock - Five times difference added in value of goods - Whether the Tribunal has erred in having dismissed the Enhancement Petition filed by the State in a preemptive manner - Held that - Tribunal has confirmed the actual finding of stock discrepancy at 19.750 grams and not 2017.250 grams, based on a certificate produced before the it from Bombay Mint dated 29.3.1988 - The Tribunal, by applying the principle of proportionality, has fixed the stock deficit at ₹ 6,000/-, approximately, and by adding another 50% of ₹ 3000/-, has arrived the turnover at ₹ 9000/-, which cannot be said to be either irrational or against the principle of law. We are of the view that the Tribunal has in fact followed the proportionality theory, which cannot be found fault with - Decided against Revenue.

Summary

Issues:
1. Consideration of sworn statement by the Tribunal
2. Reliance on ledger entry without verification of corresponding entry in Day Book
3. Dismissal of Enhancement Petition by Tribunal without proper consideration

Analysis:
1. The first issue pertains to the Tribunal's consideration of the assessee's sworn statement. The Revenue contended that the assessee cannot provide conflicting statements before different authorities, invoking the principle of approbate and reprobate. However, the Court held that there was no provision under the TNGST Act to mandate consistency in statements across different departments. The Court criticized the Revenue for failing to conduct an independent inquiry, leading to the rejection of the approbate and reprobate argument in favor of the assessee.

2. The second issue revolves around the Tribunal's reliance on the ledger entry without verifying the corresponding entry in the Day Book. The Court deemed this issue as factual, requiring no interference. Consequently, the Court ruled against the Revenue on this matter.

3. The final issue concerns the Tribunal's dismissal of the Enhancement Petition filed by the Revenue. The Tribunal confirmed the stock discrepancy at 19.750 grams based on a certificate from the Bombay Mint. By applying the principle of proportionality, the Tribunal determined the turnover at Rs. 9000, which the Court found to be reasonable and in line with legal principles. The Court upheld the Tribunal's decision, rejecting the Revenue's claim for a five times equal addition.

In conclusion, the Court dismissed the tax case revision, ruling in favor of the assessee on all substantial issues raised by the Revenue. The judgment highlighted the importance of proper inquiry and adherence to legal principles in tax assessments, ultimately upholding the Tribunal's decision in the matter.