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Judgment
Chitra Venkataraman, J.—The assesee is on revision as against the order of the Sales Tax Appellate Tribunal relating to the assessment year 1994-95 raising the following questions of law:-
Whether the Appellate Tribunal was justified in reversing the order of the Appellate Assistant Commissioner and restoring the order of assessment contrary to the accepted fact and law which was passed pursuant to the D-3 proposal formulated by the enforcement wing officials as frowned upon by the Apex Court in 9 STC 428 and the Division Bench of this Hon''ble Court in 146 STR 642.
Whether the Appellate Tribunal was correct in overlooking the law that when the entire alleged stock difference is less than 2% the G.O. Ms. No. 200 dated 26.01.1988 contemplates that such stock difference can be ignored for purpose of making assessment under the Act.?
It is seen from the facts that on 19.09.1994, there was an inspection by the Enforcement Wing Officials in the assessee''s business premises, wherein, they noticed certain defects during check of accounts. The assessee had stated that an extent of 9,750.00 kgs of HDPE and LDPE bags were available with the Bank. Based on the statement of the assessee and excess stock found by the Enforcement Wing Officials, the Assessing Officer made best judgment assessment. While doing so, the Assessing Officer also made equal time addition. Aggrieved by this, the assessee went on appeal before the First Appellate Authority.
The assessee resisted the assessment by stating that as per letter of the Indian Overseas Bank, Kodambakkam Branch, dated 23.09.1994, the total extent of stock of polythene granules stored in Key cash Godown is 8750 kgs only and the godown was under lock and key of the bank, thus, the assessee contended that the statement made at the time of inspection, admitting that 9,750 kgs of polythene granules was held with the Bank was an incorrect statement and the same could be taken only as 8750 kgs. Based on that the First Appellate Authority granted relief to the assessee.
Aggrieved by this, the Revenue went on appeal before the Tamil Nadu Sales Tax Appellate Tribunal, which, however allowed the appeal filed by the Revenue on the ground that subsequent statement of the assessee would not however cure the statement made at the time of inspection. Thus, the Sales Tax Appellate Tribunal upheld the order of assessment. Aggrieved by the same, the assessee has preferred the present Tax Case (Revision). As per the letter dated 23.09.1994 of the Indian Overseas Bank, Kodambakkam Branch, which is a Nationalised Bank, the total stock of polythene granules stored in Key cash Godown as accepted by the Bank was 8750 kgs. When that being the case, the apparent error in the statement made by the assessee cannot be taken as advantage of by the Revenue to make the assessment on the stock position. The view of the Sales Tax Appellate Tribunal was that it was a subsequent document from the Nationalised Bank and hence, it could not be given credence to the stock position. Such view of the Sales Tax Appellate Tribunal cannot be accepted since the stock was under the Bank''s custody and the assessee had no control over it at any point of time. In such circumstances, we have no hesitation in setting aside the order of the Sales Tax Appellate Tribunal. Accordingly, we allow the Tax Case (Revision) filed by the assessee. No costs.