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Judgment
P.R. Ramachandra Menon, J.—The grievance of the petitioner is in respect of Ext.P3 revised order passed by the first respondent allegedly without giving effect to Ext.P2 order passed by the Appellate Tribunal. The case of the petitioner in this writ petition shows that, there was a spot inspection at the premises of the petitioner by the first respondent on 17/1/2012, when some incriminating circumstances were taken note of. Accordingly, notice u/s 67(1) of the KVAT Act was issued proposing to impose penalty and after hearing, the petitioner was mulcted with penalty. Though the petitioner challenged the same in appeal, it did not turn to be fruitful in the first round. In the second round, the Appellate Tribunal remanded the matter vide Ext.P2 with some specific observations and directions, as contained in the Para 18 and 21; simultaneously reducing the penalty to the actual extent of suppressed turnover.
True, the first respondent, pursuant to Ext.P2 has revised the order by passing Ext.P3 in tune with the reduction of penalty as ordered therein. But the question is whether the first respondent has complied with the directions in Paragraph 18 and 21 of Ext.P2. The said Paragraphs are extracted below, for convenience of reference.
The next contention of the appellant before this Tribunal is regarding stock variation.The appellants contention is on the following lines.
The Intelligence Officer worked out the variation at 26,000 gm(short). Actually there was no such variation.
The partner Sri. T.K. Seetharaman had taken 2000 grams for pledging on 12/6/2008 with M/s. Muthoot Bankers for funding purpose and the fund was accounted in the personal account of Sri.T.K.Seetharaman. 24000 grams were given to M/s. Hasmukh Parekh, Kolkatta for manufacturing. They had issued confirmation for the same and the same is included in the annual statement of M/s. Hasmukh Parekh. The Intelligence Officer rejected the same on the reason that M/s. Hasmukh Parekh had only traders and exporters and they have no manufacturing. Appellant had produced confirmation from them to the effect that they are undertaking manufacturing also. Then the Intelligence Officer rejected the explanations on the reason that appellant had not stated about the quantity taken for funding purpose and for manufacturing. The making changes were properly accounted and necessary deduction under the Income Tax Act were also made. Another 55 grams were given to another goldsmith for manufacturing. The total sales were 49945 grams. If the issues for the manufacturing and funding purpose were considered there will not be any variation.
As far as the contention regarding pledges of 2000 grams of Kilo bar with M/s. Muthoot Bankers, no reliable evidence, especially the documents issued by M/s. Muthoot Bankers have been produced before us. Hence, we uphold the findings of the Intelligence Officer on this point. However, in respect of the transaction of 24000 grams of Kilo Bar with M/s. Hasmukh Parekh, Kolkatta, we are of the view that it is proper to direct the Intelligence Officer to re examine the appellant''s contention afresh. The appellant shall produce before the Intelligence Officer the documents received from Hasmukh Parekh in support of their contention that 24000 grams of Kilo bar were entrusted to M/s. Hamukh Parekh for manufacture of new gold ornaments. If the genuineness of the transaction is established then the Intelligence Officer shall exclude the value of 24,000 grams of Kilo bar from the suppressed turnover.
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21.The next contention raised by the appellant is with regard to the estimation of suppressed trunover of Diamond which is on the following lines.
(i) The Intelligence Officer took the opening stock as 3707-860 grams and worked out the variation at 1523-526(-). But the actual opening stock is 2189-57 gram. If the actual opening stock is considered the variation will only 5-236 grams.
(ii) The Intelligence Officer also treated 10 grams issued and returned as unaccounted sale and unaccounted purchase.
(iii) The Intelligence Officer valued entire variation worked out by him at 19531/- the carat rate. The authority below ought to have valued carat rate only for the actual carat and the balance at the rate of gold. Otherwise entire quantity should be valued at the conceded average rate of 4,864-68. In the SIR itself the quantity of diamond in carats is also noted." Copy of the stock Register and SIR was produced before us in support of the above contention. Based on the document produced before us, we are of the view that it is only proper to direct the Intelligence Officer to re examine the issue afresh. The Intelligence Officer shall adopt the correct Opening Stock of diamond for stock analysis and adopt the correct value of diamond in estimating the suppressed turnover.
Heard the Learned Government pleader as well.
On going through the materials on record and after hearing both the sides, this Court finds that the directions given by the Tribunal, particularly in the light of the observations in Para 18 and 21, if answered in favour of the petitioner, the quantum of penalty may still vary and as such, it was very much obligatory for the first respondent to have had considered and given effect to said observations as well. It is revealed from Ext.P3 revised order, that the question with regard to the said aspects, as referred to in Para 18 and 21 of Ext.P2 have not been adverted to by the first respondent. In the said circumstances, this Court finds that, the matter requires to be reconsidered by the first respondent, who shall pass a ''speaking order'' with reference to the above aspects as well.
In the above facts and circumstances, Ext.P3 is set aside and the first respondent is directed to give effect to Ext.P2 order passed by Tribunal in the right spirit and perspective, also with reference to the observations and directions contained in Paragraphs 18 and 21 as well. Taking note of the submission made by the learned Government Pleader appearing on behalf of the respondents that the petitioner, despite the specific direction given by the Tribunal has not produced any documents before the concerned authority, there will be a direction to the petitioner to produce all the relevant documents before the concerned officer of Squad No. 2, (who is stated as the Competent Officer) forthwith and the said authority shall finalise the matter, passing a ''speaking order'' as aforesaid within ''one month'' there after.
The writ petition is disposed of.