2022 (3) TMI 449 - HC - VAT and Sales Tax

Revision of assessment - stock difference in respect of groundnut and groundnut kernal - alleged suppression, existing or not - addition of suppression - levy of penalty - section 16(2) of the TNGST Act - HELD THAT - Admittedly, based on the inspection report submitted by the Enforcement Wing Officials, the assessment of the petitioner was revised by the assessing officer. During the course of inspection, 86 slips relating to business transactions of the petitioner were recovered by the Enforcement Wing Officials and out of the same, 13 slips revealed suppression of purchase of groundnut and groundnut kernel, which was valued at ₹ 7,63,500/- by the assessing officer. Taking note of the contentions raised by the petitioner that the transactions covered under the slips were brought to accounts in the month of July and the same were reported in the return and that, the petitioner paid tax for the same, the Appellate Authority deleted the said turnover. On the other hand, the Tribunal did not accept the same, upon verifying the records and was of the view that there is no correlation between the suppression that was culled out from the D7 slips and the turnover that was taken for assessment. Accordingly, the Tribunal held that the deletion of the turnover of ₹ 7,63,500/- by the appellate authority is wrong and the assessment made by the assessing officer on the turnover of ₹ 7,63,500/- is restored. Issue relating to addition - assessing officer made two times addition on the suppression - HELD THAT - The appellate authority deleted the said addition. Whereas the Tribunal after having found that the period covered in the slips for one month i.e., from 12.04.1999 to 16.05.1999 and the inspection took place in the month of June i.e., on 29.06.1999, observed that the left out months are only May and June, for which two times additions had been made. Considering the gravity of suppression, the Tribunal restricted the addition to equal time, which in the opinion of this court, appears to be correct and the same warrants no interference. Levy of penalty - HELD THAT - The Tribunal was of the view that inasmuch as the suppression is proved by the recorded evidence, the same is warranted, however, restricted to the actual suppression and is accordingly, modified. There are no fault with the finding of the Tribunal in this regard. Petition dismissed.

Summary

Issues:
1. Challenge to the order of the Tamil Nadu Sales Tax Appellate Tribunal regarding assessment and penalty.
2. Alleged suppression of turnover based on D7 slips.
3. Discrepancy in reported turnover and inspection findings.
4. Assessment revision and penalty under section 16(2) of the TNGST Act.

Analysis:
Issue 1: The petitioner challenged the order of the Tribunal regarding assessment and penalty. The assessing officer revised the assessment based on an inspection report by Enforcement Wing Officials. The Appellate Authority deleted a turnover of ?7,63,500, but the Tribunal disagreed, stating no correlation between suppression from D7 slips and reported turnover. The Tribunal's decision was based on material records.

Issue 2: The alleged suppression of turnover was based on 86 slips recovered during inspection, with 13 slips showing a suppression of ?7,63,500. The Appellate Authority deleted this turnover, but the Tribunal restored it, finding no correlation between suppression and reported turnover. The Tribunal's decision was supported by the evidence on record.

Issue 3: There was a discrepancy between the reported turnover and the inspection findings. The Tribunal noted that the left-out months from the inspection period warranted additional turnover additions, which were restricted to equal time by the Tribunal. The court found this decision appropriate and declined to interfere.

Issue 4: The assessing officer made two additions on the suppression amount, which the Appellate Authority deleted. The Tribunal, considering the gravity of suppression, restricted the addition to equal time. The Tribunal also modified the penalty, limiting it to the actual suppression. The court found no fault with the Tribunal's decision on penalty imposition.

In conclusion, the court dismissed the writ petition, upholding the Tribunal's decisions on assessment, additions, and penalty. The court found the Tribunal's reasoning based on material records and evidence, supporting the restoration of turnover and penalty imposition.