2018 (8) TMI 1325 - HC - VAT and Sales Tax

Maintaining Duplicate copy of Invoice - Carbon copy or otherwise - Best judgement assessment - case of petitioner is that there is no clear mandate of the defect noticed, of maintaining carbon copies, based on which the estimation was carried out - Rule 58(11) of the Kerala Value Added Tax Rules, 2005 - Held that - When there is a specific mandate to maintain a duplicate it can only be with a carbon copy. Otherwise, there would be duplication of the bills and also multi-transports carried out on the very same bill. This definitely would not apply to a computer generated bill. Here, it is not a computer generated bill. The duplicate bills having been entered in ink, the defect noticed on that count, cannot be faulted - the contention of petitioner is rejected. Revision dismissed.

Summary

Issues:
1. Best judgment assessment principles and estimations by Assessing Officer.
2. Defects in maintaining duplicate bills and impact on assessment.
3. Suppressions in the assessment year 2008-2009 and additions made.
4. Reduction of additions by the First Appellate Authority and confirmation by the Tribunal.
5. Question of law regarding rejection of accounts and defalcations for estimation.

Analysis:

1. The judgment refers to the principles of best judgment assessment as laid down by the Supreme Court in Commissioner of Sales Tax v. H.M. Esufali. The petitioner, a dealer involved in trading and conditioning of empty barrels, faced suppressions during the assessment year 2008-2009 leading to additions made by the Assessing Officer. The contention raised was regarding the absence of a clear mandate for the defect noticed in maintaining carbon copies for estimation.

2. The specific issue highlighted was the requirement of maintaining duplicate bills as per Rule 58(11) of the Kerala Value Added Tax Rules, 2005. The judgment clarified that the mandate for maintaining a duplicate bill inherently implies the use of a carbon copy to avoid duplication and multiple transports on the same bill. The defect observed in the duplicate bills entered in ink was considered valid, leading to the rejection of the petitioner's contention regarding the addition made due to duplication of bills.

3. The assessment order revealed suppressions based on interceptions and check post declarations, along with the duplication of bills. The Assessing Officer added 30% Gross Profit for the inter-state transaction and made a five times addition to account for probable omissions and suppressions. The First Appellate Authority reduced the addition to two times, which was confirmed by the Tribunal. The judgment concluded that the defalcations forming the basis of estimation had a reasonable nexus with the additions made, as modified by the First Appellate Authority.

4. The Tribunal's decision was upheld, stating that no question of law arose from their order. The rejection of accounts was deemed appropriate, aligning with the principles established in the H.M. Esufali case. The three defalcations identified in the assessment were considered to have a logical connection with the additions made, as adjusted by the First Appellate Authority. The Tax Revision was dismissed with no costs awarded.

This detailed analysis of the judgment from the Kerala High Court comprehensively covers the issues related to best judgment assessment, defects in maintaining duplicate bills, suppressions in the assessment year, reduction of additions by appellate authorities, and the legal implications of the decisions made.