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TMI Blog2016 (7) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... d not have directed the intelligence officer to arrive at the opening stock on the basis of the accepted stock of any previous year and taking the purchase and sale. Such an order passed by the First Revisional Authority is certainly an order prejudicial to the interest of the revenue as contemplated under Section 37 of the KGST Act entitling the commissioner of commercial taxes to exercise his powers thereunder. - Levy of penalty confirmed. X X X X Extracts X X X X X X X X Extracts X X X X ..... of accounts as provided under the KGST Act and the Rules made thereunder, it was proposed to levy penalty of ₹ 80,036/-. The assessee submitted their reply and overruling the objections raised by the assessee, Annexure-A order was passed imposing a penalty of ₹ 80,036/- for the offences of failure to maintain proper accounts and failure to keep true and correct accounts for the assessment year 1999-2000. 4. The assessee filed revision before the Deputy Commissioner who passed Annexure-B order. In Anneuxre-B order also, the finding of the intelligence officer regarding the commission of offence was confirmed. Thereafter, it was held that penalty was levied on the basis of wild estimation and accordingly, the matter was remitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence Officer at the time of verification of accounts were not supported with any evidence. Therefore, the order of the first revisional authority is erroneous and prejudicial to revenue. The order is therefore set aside." 6. It is aggrieved by Annexure-C order, the assessee has filed this application. 7. We heard the learned counsel appearing for the assessee and the learned Government Pleader appearing for the revenue. 8. The first contention raised by the learned counsel for the assessee is that the invocation of power under Section 37 was illegal in as much as Annexure-B order is not prejudicial to the revenue. Secondly, the counsel contended that penalty could not have been levied on the basis of an estimation as done by the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant Commissioner, is found to be prejudicial to the revenue, the commissioner is entitled to invoke his power under Section 37 of the KGST Act and suo motu call for and examine the order passed and pass such orders as he thinks fit. The term 'prejudicial to the interest of the revenue' was interpreted by a Division Bench of this Court in Bismillah Trading Co. v Intelligence Officer (248 ITR 292) and it has been held that if the orders under consideration as such are not in accordance with law in consequence whereof the lawful revenue due to the State has not been realised or cannot be realised, such an order would come within the ambit of this section. In so far as this case is concerned, even in Annexure-B order the fact that an o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imation has gone only to the advantage of the assessee. Therefore, the premise on which the First Revisional Authority has interfered with Annexure-A order itself is untenable. That apart when the responsibility of maintaining true and accurate accounts disclosing the stock is entirely on the assessee, the First Revisional Authority could not have directed the intelligence officer to arrive at the opening stock on the basis of the accepted stock of any previous year and taking the purchase and sale. Such an order passed by the First Revisional Authority is certainly an order prejudicial to the interest of the revenue as contemplated under Section 37 of the KGST Act entitling the commissioner of commercial taxes to exercise his powers thereu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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