9911796707
TMI Blog2010 (9) TMI 1095X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants themselves failed to explain the reasons for not producing the Books of Accounts and other required information to the CTO. Under these circumstances, the Assessing Authority is authorized to finalise the assessment work by following realistic method in estimating the turnovers. Appeal dismissed - decided against appellant. - T.A. No. 212 of 2002., - - - Dated:- 28-9-2010 - M. SEETHARAMA MURTI, U. YEDUKONDALU, JJ. ORDER Per Sri U. Yedukondalu, Departmental Member This is the Appeal filed against the Appeal Orders of the Appellate Deputy Commissioner of Commercial Taxes, Vijayawada (for short, ADC ) vide Appeal No. VJA. I/169/2000-2001, dated 9.10.2001 wherein, the ADC dismissed the Appeal filed against the Re-assessment Orders passed by the Commercial Tax Officer, Nandigama Circle, Krishna District (for short, CTO) vide G.I. No. 12864/94-95, dated 6.7.2000 under the A.P. General Sales Tax Act, 1957 (for short, APGST Act ) for the Assessment Year 1994-95. 2. FACTS The facts leading to the present Appeal and the facts of the case of the Appellants, in brief, are as follows: The Appellants were registered dealers on the rolls of the Deputy Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case. The additional turnover of ₹ 37,66,636 was unnecessarily added to the assessment to the best of judgment. On the basis of information communicated by the Vigilance and Enforcement Wing, the CTO re-assessed while taking into account the electricity consumption, but the CTO had not utilized his power of discretion as a Quasi-judicial Authority. He simply assessed the suppressed turnover as worked out by the Vigilance Officials khout using his own discretion. The re-assessment was completed only on the basis of the electricity consumption without any evidence of actual suppressions. The CTO had not examined the merits and the demerits of the inspection material received from the Vigilance Officials. The request made by the Appellants to the CTO to defer the re-assessment proceedings, in view of the Hon ble Supreme Court s mandate of the judicial principle held in the case reported in 48 STC 248, was not considered. The ADC passed the impugned orders while dismissing the Appeal without verifying the conclusions recorded in the various decisions. For finalizing the assessment to the best of judgment, the CTO was not authorized to act at the behest of the superiors or some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation. Basing on the directions of the ADC, the Appellants were requested to produce the Books of Accounts along with other information. But the Appellants failed to furnish the required information relating to the working details of the Crusher. No Books of Accounts were also produced before the CTO. In spite of issue of notices, the Appellants neither produced their Books of Accounts nor furnished the required information as called for. No other proof was also filed to support that the reports filed by the Appellants were correct and complete. As a result, the CTO was left with no alternative except to finalise the assessment as best judgment assessment and accordingly, the CTO had passed the orders. The case laws referred by the Appellants were examined in detail as under: (i) M/s. General Electric Company of India Ltd., v. The Sales Tax Officer, Kanpur, reported in 33 STC 108. In this case, it is held by the Hon ble High Court of U.P. that an assessment under Section-21 of U.P Sales Tax Act, 1948 must be based upon some material and cannot be arbitrary or capricious depending upon the ipse dixit of Sales Tax Officer. The estimation of the escaped turnover appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be allowed to prevail. In any best judgment assessment, it is open to the Assessing Authority to follow such method in its opinion which would lead to correct results, but the method followed should be such as would reduce the chances of error to as negligible extent as possible. We have heard the learned AR and perused the records carefully. The main contention of the AR is that on the strength of abnormal variations in consumption of electricity alone, no best judgment assessment on additional turnover can be made, unless there are tangible instances of concrete suppressions. The learned AR submitted that the above said judgments relied upon by the Appellants also support their contentions. However, the learned SR supported the impugned orders passed by the ADC and the orders of the CTO. The SR has relied on the following judgments delivered by the Hon ble Courts: In the decision, in case of M/s. Shanmugam Oil Mills v. Commissioner of Commercial Taxes of Karnataka State, reported in 91 STC 100, it is held by the Hon ble High Court of Karnataka that normally when a machinery is run by electricity to achieve the end-product, the consumption of the electrical energy certa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctricity when compared to the goods of 23 micron goods. The dealers further explained that the Chilling Tower was in operation even during the closure of manufacturing activity which resulted in continuous consumption of power. These explanations were not accepted by the Tribunal. The Tribunal observed that no prudent businessman would keep the Chilling Plant/Tower in operation without any production. The Hon ble High Court also dismissed the Appeal. Finally, the Hon ble High Court of U.P. held that excessive power consumption, prima facie establishes the dealers intention to suppress the production and the turnover. It is also noted that the Hon ble Tribunal and the High Court have rejected the Books of Accounts on several grounds due to imbalance of the production on the basis of electricity consumption. The Hon ble Supreme Court of India held that there was no error of law and rightly rejected the contentions of the Appellants. Thus, there is no force in this Appeal and hence it is dismissed. There has been a paradigm shift in the decisions rendered by various courts of the land, on the concept of the Best Judgment Assessment after the land mark judgment of the Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore any test of reasoning undertaken by any authority. As long as the estimation made by the Assessing Authority is not arbitrary and has nexus with facts discovered the same cannot be questioned. The Counsel for the Appellants relied on the decisions in the cases of; (i) M/s. Kalyani Oil Mills, Madras v. the State of Madras, reported in 32 STC 542. (ii) M/s. St. Teresa s Oil Mills v. The State of Kerala, reported in 25 STC 497. These decisions have been discussed and disagreed with the ratio laid down therein, by the Hon ble High Court of Kerala in the case of M/s. K.T. Antony v. State of Kerala, (1976)37 STC 148. Further, the observations of the Hon ble Supreme Court of India in case of M/s Melton India v. Commissioner-Trade Taxes, U.P. squarely applies to the instant case on hand. Having regard to the facts of the case, we may say that in this case it cannot be said that estimation of turnover was made purely on the basis of electricity consumption only. In the case on hand, the Appellants, despite a written notice issued by the CTO, had failed to produce their Books of Accounts. As seen from the facts of some of the reported cases, the Assessing Authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
