2017 (4) TMI 632 - HC - VAT and Sales Tax

Mismatch of turnover with figures recorded - applicant submits that it was only 734 containers, which had not matched with the figures disclosed in exhibit-3, viz-a-viz sales of M/s Golden Agro Products and at best, sales to that extent alone could be added in the turnover of the assessee. Submission is that the entire quantity mentioned in exhibit-3 could not be relied upon to increase turnover - Held that - it is only to the extent figures had not matched with the figures of sale disclosed by M/s Golder Agro Products, viz-a-viz the details mentioned in exhibit-3 that any addition in turnover of sale could be allowed by the Tribunal. The containers which had already been accounted for in the form of sales figures of M/s Golder Agro Products, could not have been treated to be the sales made by the assessee - such factual issues require consideration by the Tribunal, and it is only to the extent of undisclosed figures shown in exhibit-3 that turnover of sale of assessee could have been enhanced - appeal allowed by way of remand.

Summary

Issues:
1. Assessment of turnover based on discrepancies in sales records.
2. Reliability of exhibit-3 register in determining sales figures.
3. Interpretation of sales data and turnover calculation.
4. Jurisdiction of the Tribunal in revisiting factual issues.

Analysis:
1. The case involves the assessment of turnover for the assessee, a registered dealer manufacturing soft drinks, for the assessment year 1996-97(U.P). The assessing authority found discrepancies in the sales records, with 7,968 containers allegedly sold over and above the disclosed sales figure of 8,776 containers. The dispute arose from a survey conducted where a register, exhibit-3, showed conflicting sales data. The assessee contended that exhibit-3 did not belong to them and was used to gauge market reaction, not to record actual sales.

2. The First Appellate Authority compared the sales data in exhibit-3 with that of another company, M/S Golden Agro Product Limited, and found a partial match. Considering the nature of the commodity being excisable, the Authority accepted the assessee's defense and upheld their sales figures. However, the Tribunal overturned this decision, stating that discrepancies existed on certain dates between exhibit-3 and sales data of M/S Golden Agro Products, without satisfactory explanation from the Authority.

3. The Tribunal relied on exhibit-3 to attribute the entire sales figure of 7,968 containers to the assessee, leading to a tax liability. The applicant argued that only 734 containers did not match with M/S Golden Agro Products' sales figures and should be added to the turnover. The Court agreed, emphasizing that only the unmatched figures in exhibit-3 could be considered for turnover enhancement, not the entire quantity. The matter was remitted back to the Tribunal for a fresh review based on this interpretation.

4. The Court acknowledged the factual complexity of the case and deemed it appropriate for the Tribunal to reevaluate the discrepancies in sales data. It emphasized that only the undisclosed figures in exhibit-3 should impact the turnover calculation. The revision was granted to the extent that turnover enhancement should be based solely on the unmatched sales figures, requiring a fresh consideration by the Tribunal.