2022 (2) TMI 597 - HC - VAT and Sales Tax

Restoration of assessment order - transaction between the petitioner and the 7 registered dealers in respect of the alleged sale of raw skins, was a fictitious/not genuine or not - transfer of property - sine qua non for a sale from the petitioner to the 7 registered dealers - question of fact or not - job tanning charges - wet blue skin after tanning of the raw skins alleged to have been sold to the 7 registered dealers - suppression on the basis of stock variation found in the inspection - HELD THAT - The issues are essentially question of facts and the same do not give rise to any question of law warranting interference at the hands of this court - reliance placed in the case of METROARK LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CALCUTTA 2004 (1) TMI 397 - SUPREME COURT where it was held that The Tribunal is the final fact-finding authority. Unless it is shown that there is something perverse in its finding, this Court would not interfere. No authority is required for this purpose. That apart, it is settled law that a court of appeal interferes not when the judgment under attack is not right, but only when it is shown to be wrong . The writ petition deserves to be dismissed as devoid of merit - Petition dismissed.

Summary

Issues:
Assessment order challenge - Restoration of assessment order by Tribunal - Genuine sale of raw skins - Tax levy on stock variation.

Analysis:

Assessment Order Challenge:
The petitioner, a dealer in hides and skins, challenged the order of the Tamil Nadu Sales Tax Appellate Tribunal in S.T.A No.618 of 2002. The petitioner reported a total and taxable turnover for the assessment year 1992-93. An inspection revealed defects, leading to a best judgment assessment by the assessing officer. The Tribunal set aside the order of the Appellate Authority and remanded the matter to the assessing authority. The Tribunal later restored the assessment order, which was challenged by the petitioner in this writ petition.

Genuine Sale of Raw Skins:
The Tribunal found that the petitioner's claim of selling raw hides and skins to 7 registered dealers was not genuine. The Tribunal observed that the petitioner retained ownership of the raw hides and skins, indicating a modus operandi to evade tax. The Tribunal rejected the petitioner's explanation regarding the alleged sale, leading to the restoration of the assessment order by the assessing authority.

Tax Levy on Stock Variation:
Regarding the turnover related to stock variation, the petitioner explained that they reported excess stock to the bank for credit facilities. However, the Tribunal deemed this explanation unsupported by records and cited precedent to reject it. Consequently, the Tribunal restored the assessment order and penalty, setting aside the order of the Appellate Assistant Commissioner.

Court's Decision:
The Court noted that the issues raised were primarily questions of fact rather than law. The Court emphasized that the Tribunal is the final fact-finding authority, and interference is warranted only in cases of perversity in findings. Citing legal precedents, the Court highlighted that appellate intervention occurs when a judgment is proven wrong, not merely when it is deemed incorrect. Consequently, the Court dismissed the writ petition for lack of merit, without costs, and closed the connected miscellaneous petition.