2012 (7) TMI 1164 - HC - VAT and Sales Tax

Summary

Issues involved: Assessment of turnover for presumptive tax payment u/s 6(5) of the Kerala Value Added Tax Act, 2003 for the years 2006-07, 2007-08, and 2008-09.

Assessment Years 2006-07 and 2007-08:
- The dealer, a seller of ice creams, opted for presumptive tax payment u/s 6(5) for turnover below Rs.50 lakhs.
- Assessing authority found suppressed purchase turnover, leading to denial of presumptive tax benefit and assessment u/s 6(1).
- First appellate authority and Tribunal reduced additional turnover to 1.5 times and 25% of suppressed turnover, respectively.

Questions of Law Raised:
1. Whether authorities erred in making arbitrary additions post-compounding of offense u/s 74 of the KVAT Act.
2. Whether authorities were justified in making additions exceeding actual suppression.
3. Whether authorities were justified in adding gross profit without justification.

Post-Compounding Assessment:
- Composition of offense u/s 74 does not exempt assessment proceedings.
- Best judgment assessment for evasion is discretionary and not a penalty.
- Assessee's attempt to claim exemption based on reductions by appellate authorities rejected.

Additions and Gross Profit:
- Pattern of suppression evident in 2006-07 and 2007-08.
- Appellate reductions considered discretionary, not exempting from additions.
- Gross profit addition necessary for multiple sales, based on assessee's concessions.

Conclusion:
- Revision petitions dismissed, upholding Tribunal's orders.
- Concern raised over incorrect tax imposition post-presumptive tax denial.
- Act's provisions not followed in tax assessment, indicating legislative intent deviation.

This summary provides a detailed overview of the judgment, including the issues involved, assessment details for each year, questions of law raised, explanations on post-compounding assessment, additions made, and the final conclusion of the court.