2019 (1) TMI 1697 - HC - VAT and Sales Tax

Whether, the Tribunal is legally justified to allow the department's appeal and restore the assessment order without dealing with the findings recorded by the first appellate order? - HELD THAT - The Tribunal has allowed the appeal of the Department without dealing with the findings recorded by the first appellate authority is clearly incorrect. The Tribunal has dealt with the findings recorded by the first appellate authority and as further looked into the facts of the case itself and therefore, the submission made by learned counsel for the revisionist in this regard is incorrect - the question answered in favour of the Revenue and against the revisionist. Whether, the rejection of books of account of the applicant and estimation of turnover is wholly perverse, arbitrary and excessive? - HELD THAT - The Tribunal has considered in detail the findings recorded by the SIB to the effect that the entire business of the revisionist, as claimed by it appears to be a sham, no manufacturing activity was carried out by the revisionist firm in its factory premises - The books of account which were maintained were not available at any of the addresses mentioned by the revisionist. The goods and raw material used in the manufacturing process were not mentioned by the revisionist in its books of account and all these facts were sufficient for the assessing authority to reject the books of account and make the best judgment assessment - the second question of law is also answered in favour of the Revenue and against the revisionist. Revision dismissed.

Summary

Issues:
Challenging Trade Tax Tribunal's order dated 29.02.2008 in Second Appeal No. 610 of 1999.
1. Legality of Tribunal's decision to allow the department's appeal without addressing first appellate authority's findings.
2. Validity of rejection of revisionist's books of account and turnover estimation.

Analysis:

Issue 1: Tribunal's Decision in Allowing Department's Appeal
The revisionist challenged the Trade Tax Tribunal's order dated 29.02.2008, questioning the legality of allowing the department's appeal without addressing the first appellate authority's findings. The Tribunal examined the first appellate authority's conclusions and conducted an independent review of the case. It was found that the Tribunal did consider the first appellate authority's findings and the facts of the case, thereby rejecting the revisionist's argument. Consequently, the first question of law was answered in favor of the Revenue and against the revisionist.

Issue 2: Rejection of Revisionist's Books of Account
The Tribunal extensively analyzed the rejection of the revisionist's books of account. The Special Investigation Branch (SIB) reported discrepancies during surveys, indicating a lack of genuine business transactions. The SIB found no books of account at the manufacturing site, and items to be manufactured were scarce. Even at other locations mentioned by the revisionist, no books of account were found. The Tribunal concurred with the SIB's assessment that the revisionist's business operations seemed fabricated, leading to the rejection of the books of account. The absence of key manufacturing details in the records further supported the decision for a best judgment assessment. Consequently, the second question of law was resolved in favor of the Revenue and against the revisionist.

In conclusion, the revision was dismissed for lacking merit based on the Tribunal's detailed analysis of the issues raised. The Tribunal's decision was upheld, affirming the rejection of the revisionist's books of account and the subsequent best judgment assessment.