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Judgment
A.K.Jayasankaran Nambiar, J.
This revision petition impugns the order dated 26.11.2021 of the Kerala Value Added Tax Appellate Tribunal, Ernakulam in TA (VAT) No. 564 of 2019.
The brief facts necessary for disposal of this OT Revision are are follows:-
The revision petitioner is an assessee on the rolls of the Assistant Commissioner, Special Circle III, Ernakulam. In the assessment under the Value Added Tax Act for the assessment year 2011-2012 the assessing authority noted that the petitioner had conceded a closing stock of Rs.2,67,94,845/- and that the said value was arrived at after deducting the value of battery and spare parts amounting to Rs.13,99,851/- and engine oil worth Rs,8,43,141/-. The deduction was on the ground that the said amounts represented damaged and obsolete/ unsaleable goods from previous assessment years. The assessing authority disbelieved the said contention of the assessee and the said amount was also brought to tax after adding gross profit at the rate of 12.8%. The appeals preferred by the petitioner against the said assessment order did not meet with any degree of success either before the first Appellate authority or before the Appellate Tribunal. The Appellate Tribunal found the contention of the petitioner with regard to the damaged goods to be unacceptable since he had not uploaded the Form 53, which was a necessary pre-requisite to claiming such deduction. Although, the petitioner preferred a rectification petition before the Appellate Tribunal, the same also came to be dismissed.
When this revision petition came up for admission before us, taking note of the submission of the learned counsel for the petitioner that he had records to demonstrate that the deduction claimed in the value of closing stock actually represented obsolete unsaleable material that could not be assessed to tax, we directed him to produce the said records before the assessing authority for the purposes of verification of the genuineness of those documents. This was by our order dated 14.03.2023, which is extracted below:
“Pursuant to our oral direction to the learned counsel for the petitioner to produce a reconciliation statement as regards battery and other parts for the purposes of showing that the discrepancy in the closing stock was essentially on account of the revaluation of old stock/obsolete stock/damaged stock which pertained to earlier years, the petitioner has now produced as Annexure-G, a reconciliation statement to establish his contention as regards old stock/obsolete stock/damage stock. In order to verify the authenticity of the said reconciliation statement and the correctness of it, we deem it appropriate to direct the petitioner to produce the said statement together with the supporting records before the Assessing Authority, Special Circle-III, Ernakulam, on 20.03.2023. The said Assessing Authority shall after going through the reconciliation statement produced by the petitioner, submit a report before us as regards the reliability of the said statement for the purposes of completing the assessment against the petitioner. The report shall reach this Court by 28.03.2023. Post on 30.03.2023”
Pursuant to the aforesaid order, the assessing authority has filed a report, the last paragraph of which reads as follows:-
The reconciliation statement-Annexure G together with the supporting documents submitted by the petitioner on 20-03-2023 before this office are found reliable documents. Any audit difference can only be claimed in support of documentary evidence to substantiate the claim. But the petitioner has failed to submit these documents along with Form No.13 Audit Report, Form No.13A audited Balance Sheet and audited Profit and Loss Account for the year ended on 31-03-2012 at the time of filing. Also it is noted that the petitioner has not submitted these documents before appellate authorities, Deputy Commissioner (Appeals), VAT Appellate Tribunal, Ernakulam.”
In view of the fact that the assessing authority has now accepted that the documents produced by the petitioner are reliable, and that the only reason for disallowing the claim of the assessee was the non-production of those documents along with Form 13 audit report, Form 13A audited Balance Sheet and the audited Profit and Loss Account for the year ended 31.03.2012, we feel that the said technical reasons need not be a reason to deny the petitioner the substantive benefit of deduction of the amounts from the taxable turnover for the year. Accordingly, we set aside the impugned orders of the Tribunal and remit the mater back to the assessing authority for passing a fresh assessment order, taking into consideration the documents now produced by the petitioner before the assessing authority, and which were found as acceptable by the assessing authority, for the limited purposes of passing a revised assessment order. We make it clear that mere fact that the petitioner had failed to produce those documents along with the audit reports, audited Balance Sheet and audited Profit and Loss Account for the year ended 31.03.2012 shall not be a reason for denying the benefit of the deduction to the petitioner - assessee. The assessing authority shall pass fresh orders within a period of one month from the date of receipt of a copy of this judgment and to enable the assessing authority to do so the petitioner shall appear before the assessing authority on 17.04.2023.
The OT Revision is disposed as above.