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TMI Blog2009 (4) TMI 867X X X X Extracts X X X X X X X X Extracts X X X X ..... siness on behalf of the appellant-assessee. The revisional authority was justified in holding that the so-called agency agreement is a created and got-up document for the purpose of evading payment of tax and penalty. We do not find any good ground to interfere with the orders of the revisional authority. Appeal dismissed. - Sales Tax Appeal No. 44 of 2009 - - - Dated:- 3-4-2009 - MANJULA CHELLUR AND NAGARATHNA B.V. , JJ. The judgment of the court was delivered by Mrs. MANJULA CHELLUR J. The applicant herein is one R.C. India represented by its partners Sri Nijalinge Gowda. The brief facts that have led to the filing of the present appeal are that the appellant is a partnership firm constituted for carrying on the business of excavating and sale of rough granite blocks. The Deputy Commissioner of Commercial Taxes (Transition 31) the assessing authority of the appellant relying upon the investigation and inspection report from the Joint Commissioner of Commercial Taxes (Vigilance), Bangalore, estimated the turnover of the appellant for the assessment year 2004-05 at Rs. 16,86,245 with rate of tax at 12 per cent. Aggrieved by the same an appeal was preferred before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e end of 2004-05. Said Prabhath Granite Pvt. Ltd., had the agreement with it. As a matter of fact, the sale consideration from the buyers of granite was not even paid to the appellant. Ultimately, the agency was terminated in the end of 2005. However, the relationship was strained till 2007. According to the appellant, only when he received the proposition notice to treat the transaction of Prabhath Granite Pvt. Ltd., as the sales turnover at the hands of the appellant, the appellant rushed to Prabhath Granite Pvt. Ltd., requesting them to help out the appellant. Accordingly, Prabhath Granite accepted that rough granite blocks were extracted and transported for sale by them from Achalu mining area in survey No. 53, Kanakapura Taluk, over which the appellant had licence. A certificate was issued on December 10, 2007 for the assessment year 2000-01 to 2004-05. Declaration form 39 was also used according to Prabhath Granite Pvt. Ltd. As the appellant totally forgot to mention the existence of agency agreement, there was confusion which led to the filing of the present appeal. According to the appellant, Prabhath Granite Pvt. Ltd., being the agent of the appellant is liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port gave details of the excavation and extraction of rough granite blocks for the year 2004-05 as per the information from Department of Mines and Geology. The call notice served on the dealer was replied to. The account books produced reflect the sales of rough granite blocks only at Rs. 3,10,473. Best judgment assessment was done after taking into consideration the expenditure inevitably required to be incurred. The assessing authority taking into consideration the contention of the appellant that Prabhath Granite Pvt. Ltd., was its agent, went into the details and found that Prabhath Granite Pvt. Ltd., had transported rough granite blocks by using form No. 39 declarations. So far as the appellant-assessee is concerned, it held that the assessee had not maintained proper books of accounts and has not paid the tax and cannot ask for reasonable estimation and ultimately assessed the turnover and arrived at Rs. 16,86,245 as the tax payable. When the appeal was filed, the appellate authority held that the assessing authority ought to have initiated proceedings under section 12A and not under section 12(3) of the Act. It further held that the assessing authority was not justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent as a genuine document, several aspects have to be considered. We have also perused a copy of the agency agreement dated February 1, 2000 between the assessee and Prabhath Granite Pvt. Ltd. The purpose of the agreement is for extracting and selling granite blocks for a period of five years from the date of execution of the said agreement. Clause 4 of the agreement reads as follows: That the agent shall have the exclusive right to procure orders from customers. The agent shall not have any right to make any representation in the trade. The fact that the agent has been termed as a sole-selling agent prima facie means that the granite extracted became the exclusive right of the agent, i.e., Prabhath Granite Pvt. Ltd. The manner in which Prabhath Granite Pvt. Ltd., acquired exclusive right and title to deal with the granite blocks is not forthcoming from the said agreement. In business parlance sole-selling agent has the exclusive right to the product for which the agency is created and the said products are obtained by payment of consideration, in which event he would be a sole-selling agent who in turn would have the right to dispose of the products to various purchasers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal authority is justified in opining that, to the present case section 12(3) read with section 18(3) would apply and not section 12A. Therefore, he was justified in holding that the order of the appellate authority was illegal, as well as prejudicial to the interest of the Revenue. The learned counsel for the appellant relied upon the decision of the Division Bench of this court in Shankar Construction Co.'s case [2001] 124 STC 265 (Karn) referred to supra, to contend that the notice issued in the instant case by the revisional authority was not valid and not in accordance with law, as the notice had virtually concluded the matter. In the said decision the revisional authority had issued show-cause notice which indicated to the assessee that he proposed to revise the assessment and conclude the same. The Division Bench held that by use of the said phraseology, the revisional authority had prejudged the issue and the same was contrary to the whole purpose of issuing the show-cause notice. We do not see how the said decision is of any assistance to the appellant inasmuch as the show-cause notice issued by the revisional authority in this case merely states the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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