9911796707
TMI Blog1993 (7) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... count and the returns submitted by the dealer. A best judgment assessment was passed on July 28, 1991. In appeal, the Appellate Assistant Commissioner, Alappuzha, by order dated October 11, 1991, modified the order of assessment to some extent. In second appeal, the Sales Tax Appellate Tribunal, Additional Bench, Ernakulam, by order dated February 12, 1992, dismissed the appeal. The said order of the Appellate Tribunal is under challenge in this revision. 2.. We heard counsel. 3.. The books of account were rejected since, on inspection of the business place by the intelligence wing, it was found that the assessee was not maintaining correct and complete accounts. The offence was compounded by the assessee by paying Rs. 350. It could be so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... August 20, 1987, were effected from the purchases effected after August 20, 1987. The stock value as on March 31, 1988, constituted only those goods purchased before August 20, 1987. This aspect was omitted to be noticed by the Appellate Tribunal in adding the value of the opening stock of Indian made foreign liquor as per the accounts as on April 1, 1988, in the taxable turnover by adding a gross profit of 40 per cent and thus estimating the sales turnover at Rs. 1,11,854. 5.. We find that the accounts and the returns were rejected on very valid grounds. The inspection conducted in the assessee's business place on June 29, 1988 (wrongly stated to be on April 12, 1988) disclosed various discrepancies in the stock of various items and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reject the said plea. 7.. On merits, we are of the view that the Appellate Tribunal has not adjudicated the matter from a proper angle. Paragraph 3 of the pre-assessment notice is to the following effect: "The opening stock of Indian made foreign liquor as per accounts as on April 1, 1988 for Rs. 79,896 is subjected for levy of two tier tax at 15 per cent on its sales. The sales turnover of opening stock of Indian made foreign liquor will be estimated at Rs. 1,11,854.40, i.e., by adding 40 per cent gross profit on Indian made foreign liquor as per accounts and assessed to tax and exemption claimed on the second sale of Indian made foreign liquor disallowed to that extent." The assessee's reply thereto in paragraph 4 is as follows: "Your ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be taxed again under entry 76-A of the First Schedule. It is also stated that even if some portion of the stock as on April 1, 1988, constitute purchases made after August 20, 1987, that could be assessed if and only if those goods are actually sold. Therefore your assumption that the opening stock on April 1, 1988, is entirely sold is against law. It is also submitted that we may be allowed a further opportunity to furnish the quantitative details regarding the above submissions." The Appellate Tribunal, in paragraph 5 of its order, has adjudicated this matter thus: "The opening stock value of Indian made foreign liquor as per the account as on April 1, 1988 is Rs. 79,896. The assessing authority added a gross profit of 40 per ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be plausible for the assessee to contend even in the absence of separate accounts, the natural presumption will be that a person engaged in a business will presumably follow that course which takes him out of the taxable category rather than the other way. We are of the view that the natural presumption that a person engaged in a transaction will presumably follow that course which takes him out of the taxable category may apply in such cases, as held by the Madras High Court in Rathinaswamy Chettiar v. State of Madras [1962] 13 STC 419. This aspect of the matter has not been borne in mind nor viewed in a proper angle by the Appellate Tribunal when it held that the opening stock as on April 1, 1988, in a sum of Rs. 79,896 is not entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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