2013 (11) TMI 53 - HC - VAT and Sales Tax

Suppressed sales turnover - Discrepency in books of accounts - Non maintenance of records for inter state purchases - Penalty u/s 12(3) - Held that - A reading of the order of the Assessing Officer, the Appellate Assistant Commissioner and the Tribunal shows the inconsistent stand taken by the assessee. While before the assessing officer the assessee denied having any transaction with the Delhi parties, before the Tribunal, the assessee accepted the purchase effected from these sources. Thus, the extracts and the stock variation clearly pointed out the nature of dealing of the assessee warranting equal addition, as had been done by the Appellate Assistant Commissioner - Tribunal passed a very mechanical order, extracted the arguments and accepted the plea of the assessee on the face value to delete the equal time addition. Although, normally, on a revision this Court does interfere with the order of the Tribunal, where there are findings of the Tribunal, which is the highest fact finding authority in the hierarchy of appeal and revision authorities, when the order of the Tribunal lacks any material to base its view and when there is no discussion at all as to why it thought fit to cancel the estimated addition, on the face of the materials available, as had been found by the Assessing Officer, as well as the Appellate Assistant Commissioner, we uphold the contention of the Revenue - Decided against assessee.

Summary

Issues:
1. Assessment of total and taxable turnover for the assessment year 1993-1994.
2. Levying penalty under Section 12(3) of the Tamil Nadu General Sales Tax Act, 1959.
3. Denial of inter-state purchases by the assessee.
4. Appeal before the Appellate Assistant Commissioner regarding stock variation and purchase suppression.
5. Appeal before the Sales Tax Appellate Tribunal challenging the addition made based on actual suppression and probable omission.
6. Inconsistencies in the stand taken by the assessee before different authorities.
7. Tribunal's order lacking discussion and basis for canceling estimated additions.

Analysis:
The High Court of Madras dealt with a revision filed by the Revenue against the Sales Tax Appellate Tribunal's order concerning the assessment year 1993-1994. The case involved an inspection revealing deficit stock of S.S. Sheets at the appellants' business place. The Assessing Officer determined the total and taxable turnover, along with levying a penalty under Section 12(3) of the Tamil Nadu General Sales Tax Act, based on the inspection results. The assessee denied inter-state purchases during the assessment, leading to subsequent appeals (paragraphs 2-4).

The Appellate Assistant Commissioner confirmed the assessment on actual suppression but sustained the addition made for probable omission. Subsequently, the assessee appealed before the Sales Tax Appellate Tribunal, arguing against the purchase suppression based on documents seized. The Tribunal, in a brief order, accepted the assessee's plea without substantial discussion, leading to the deletion of the equal addition made by the Appellate Assistant Commissioner (paragraphs 5-6).

The High Court noted inconsistencies in the assessee's stand before different authorities and criticized the Tribunal's order for lacking a proper basis for canceling estimated additions. Despite generally respecting the Tribunal's findings, the High Court intervened due to the lack of reasoning in the Tribunal's decision. Consequently, the High Court allowed the Tax Case Revision, setting aside the Tribunal's order and restoring the Appellate Assistant Commissioner's order (paragraph 8).