2018 (6) TMI 1065 - HC - VAT and Sales Tax

Restoration of order of Assessing Officer - addition of ₹ 42,24,413/- on the ground of probable sale suppression - whether the addition of ₹ 42,24,413/- on account of probable suppression was so unreasonable that it requires the interference of this Court? - Revisionary Jurisdiction of High Court - Held that - Admittedly the Assessee, failed to account for invoice No.48 dated 03.12.2004 issued by Tvl. Lakshmi Stores to the Assessee. The findings of all three forums below have been that the Assessee did not maintain his accounts properly - A reading of Section 16 of the Act, makes it amply clear that the Assessing Officer had the power to add the amount in dispute, on account of probable omission. The use of the words, to the best of it's judgment creates a wide discretionary power upon the Assessing Officer, who in the instant case has taken the view that in light of the suppression that was uncovered, it was plausible to assume that the Assessee must have suppressed sales at least worth ₹ 42,24,413/-. This view ultimately found favour with the Appellate Tribunal as well. The view taken by the Tribunal is a probable view, and the High Court while exercising its revisionary jurisdiction should not substitute its own view to the view taken by the last fact finding Authority - there is no error in the decisions of the authorities below - tax case revision dismissed.

Issues:
Challenge to order of Sales Tax Appellate Tribunal regarding probable suppression of sales and restoration of Assessing Officer's order.

Detailed Analysis:

1. Background and Assessing Officer's Order:
The revision petition challenges the Sales Tax Appellate Tribunal's order dated 12.06.2013, which allowed the appeal of Revenue Authorities, setting aside the Deputy Commissioner's order and restoring the Assessing Officer's decision to add ?42,24,413/- to the Assessee's turnover due to probable suppression of sales.

2. Facts and Assessing Officer's Findings:
The Assessee, a dealer in gold and silver jewellery, reported a total turnover of ?4,31,68,855/- for 2004-05. The Assessing Officer, however, assessed the turnover at ?6,90,96,140/-, noting a discrepancy in accounting for gold bullion purchases. The Assessing Officer added ?42,24,413/- for probable suppression and issued a demand notice.

3. Deputy Commissioner's Decision:
On appeal, the Deputy Commissioner confirmed the suppression amount but deleted the addition for probable omission. The Deputy Commissioner found no incriminating evidence besides incomplete accounts, partially allowing the Assessee's appeal.

4. State's Appeal and Tribunal's Ruling:
The State appealed the deletion of probable omission amount, arguing that deficit stock indicated suppression. The Appellate Tribunal agreed, restoring the Assessing Officer's order, emphasizing the estimation fairness of suppression and omission amounts.

5. High Court Review and Arguments:
The Assessee challenged the Tribunal's decision, arguing against deliberate suppression due to a dispute with the vendor. The State supported the Tribunal's judgment, emphasizing the Assessee's failure to account for the transaction promptly.

6. Court's Analysis and Conclusion:
The High Court noted its limited supervisory jurisdiction and the need for a strong reason to interfere with lower authorities' orders. Considering the Assessee's failure to account for the transaction and discrepancies in stock inventory, the Court upheld the Tribunal's decision. The Court found no error in the Tribunal's reasoning and dismissed the Tax Case Revision.

In conclusion, the High Court upheld the Sales Tax Appellate Tribunal's decision, emphasizing the Assessee's failure to maintain proper accounts and justifying the addition for probable suppression based on the Assessing Officer's discretion and the Tribunal's findings.

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