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Judgment
S. Rajendra Babu, J.-These petitions arise out of the common order made by the Karnataka Appellate Tribunal, Bangalore, affirming the orders of revision made for the assessment years 1986-87 to 1991-92.
The petitioners filed returns declaring certain turnovers for the relevant periods. The Assessing Authority did not accept the returns and rejected the same on the ground that the petitioners had not disclosed the unregistered dealers purchase of sand and they had not furnished details of materials used for each contract except materials purchased as detailed therein. Under the circumstances, the Assessing Authority concluded on the basis of a best judgment assessment. He allowed deduction of 30% of the gross turnover declared towards labour charges and in respect of materials he granted 45% of the gross turnover as deduction and levied tax on the balance of the turnover. The assessments were examined by the Joint Commissioner of Commercial Taxes, who considering the same to be improper, erroneous and being prejudicial to the interest of the Revenue, issued notices to the petitioners as provided under Section 21 of the Karnataka Sales Tax Act (for short the ''Act''). In that notice it was stated that upon cross-verification of the list of purchases filed by the petitioners it was found out that the selling dealers mentioned in the list had denied having sold any materials to the petitioners and issued the bills as indicated in the list. On that basis he drew a prima facie inference that the list of purchases filed by the petitioners were false and the assessments had been concluded by taking into consideration such list of purchases. The Assessing Authority, having concluded the assessments without verifying the aforesaid aspects, was found to have reached an erroneous conclusion, which was prejudicial to the interest of the Revenue and therefore it was necessary to invoke the provisions of Section 21 of the Act for reviewing the orders made by the Assessing Authority. Thereafter, a reply was filed by the petitioners stating as follows:
"On 17-2-1994 the respondent has filed letter stating as following:
"With reference to the above, I write to inform you that, I have not made any purchase from the dealer list furnished by our Auditor (without our knowledge) and I am a Asphalting Road Contractor executing works contract with Bangalore City Corporation and not the building Contractor" and hence I request your goodself kindly to treat the purchase statement not given"".
Thereafter, petitioners sought for time on 21-2-1994 upto 3-3-1994 and again on 3-3-1994 their Advocate appeared and sought for some more time to file their objections and the matter was adjourned to 7-3-1994. On 7-3-1994 objections were not filed. On 9-3-1994 an application was filed by the petitioners seeking adjournment till 31-3-1994 for the reason that they wanted to appoint an Advocate since Advocates are all busy in the month of March. The Revisional Authority found that the petitioners had engaged an Advocate, who had appeared on an earlier occasion and sought for time to file objections and therefore held that the application filed later by the petitioners was only part of tactics to gain time and was a ruse to prolong the revisional proceedings. Therefore he, concluded the revisional proceedings on the basis of the material available before him. The Revisional Authority held that the assessments made were not proper and the deductions allowed towards the materials at 45% to 52% of the gross receipts were not correct and set aside the same and ordered to levy tax on that part also. Aggrieved by those orders, petitioners, preferred appeals before the Appellate Tribunal. Several grounds were raised before the Appellate Tribunal, which were considered by it and the appeals were dismissed.
Before us, in these revision petitions which are filed against the orders made by the Tribunal, it is urged that the Revisional Authority could not have invoked the jurisdiction under Section 21(2) of the Act, inasmuch as the material before it was only of such nature which would only enable it to make another best judgment assessment and the notice issued by the Revisional Authority did not contain the necessary details to enable the petitioners to ascertain the nature of the information secured by the respondents, which was the basis of the revision.
The show-cause notices issued to the petitioners under Section 21(4) of the Act is available in the records. They make it clear that the Assessing Authority had concluded the assessments by relying upon the purchase statements filed by the petitioners, which he did not subject to cross-verification and it was found that the sellers, whom they had mentioned in the list, had denied having issued such bills. It was evident from the same that the bills with the numbers mentioned in the purchase statement have not at all been issued by the selling dealers during the year nor any such series of bills were available with them. They also denied that they had such transactions with the petitioners either on cash or credit basis on the relevant dates mentioned in the purchase statements.
If the Assessing Authority had relied upon materials which were not relevant for the purpose of the assessments or were not applicable to the petitioners or they were not genuine bills, the only conclusion that could be drawn is that the Revisional Authority was within its powers to invoke its jurisdiction. The notices issued to the petitioners do contain necessary information as to the basis of revision, that is, that the purchase statements filed by the petitioners cannot be relied upon since they contain information with reference to bills which are not reliable and therefore calls for revision. If petitioners wanted any further information, they could have sought for the same. In our view the show-cause notices issued to the petitioners contain complete and necessary details. In that view of the matter, we find no substance in the first contention urged and the same is rejected.
It is next urged on behalf of the petitioners that reasonable opportunity was not given to the petitioners.
The petitioners had engaged an Advocate. On two occasions he appeared and has sought for time and obtained time. It is only on the third occasion the petitioners appeared in person and stated that they are trying to engage an Advocate. Therefore, the Revisional Authority was justified in thinking that the petitioners were only putting forth a lame excuse before it for securing more time and that was only by way of dilatory tactics. We do not think that we can take any exception to the view taken by the Revisional Authority in that regard.
The Tribunal noticed in the course of its orders that even before the Tribunal the petitioners'' Advocate was asked to produce the books of accounts and file list of registered dealer purchases, if any, and the learned Advocate expressed his inability to do so. We do not think the basis for seeking further time before the Revisional Authority in any manner was well founded or justified when the petitioners were not prepared even before the Appellate Authority to produce the necessary materials in support of their cases. Hence, we do not think the grievance of the petitioners that they did not have enough opportunity either before the Revisional Authority or before the Appellate Authority is well founded. Hence, the second argument also is liable to be rejected.
Thirdly, it is urged that the petitioners being only contractors, who asphalt roads, they have purchased the materials for the same from some persons and therefore necessarily they should be having bills in that regard and those bills could certainly be produced before the authorities and if one more opportunity is given to the petitioners to produce such material nothing would be lost to the State and this Court should show its indulgence and allow the petitioners to place the satisfactory proof in support of their case.
This argument ignores one important aspect of the provision of law. In Sl. No. 6 under Sixth Schedule to the Act, the civil works like construction of buildings, bridges, roads, etc., are covered by Entry 31 and certain portions mentioned therein are liable to tax. If the petitioners want to claim any deduction they must comply with the terms of sic [Rule 57] read with Rule 6(4). Rule 6(4)(n) provides that in the case of works contracts mentioned in Sl. No. 6 of the Sixth Schedule, relating to the petitioners, deduction is admissible on all amounts for which any goods specified in Second and Fourth Schedules are purchased from registered dealers liable to pay tax under the Act. Therefore, it is clear that deduction would be available to the petitioners only upon satisfactory proof of producing such material that purchases are made from the registered dealers who are liable to pay tax. In such a case there is no scope for any guess work and deduction is permissible only on strict compliance thereto. In that view of the matter, if the petitioners wanted to take the benefit of the said provisions, they should have complied with the terms thereto. Not having done so, they are seeking indulgence of this Court at this stage. For what best reasons the petitioners did not make the necessary bills available at the appropriate stage is for them to explain. We are not satisfied that there is any justification to give one more opportunity to the petitioners. Therefore, the third contention also is liable to be rejected.
It is urged before us that the Assessing Authority did not rely upon the material, which the Revisional Authority referred to as an infirmity in the course of the order of the Assessing Authority and therefore there is no basis for revision at all. The Assessing Authority in fact stated that the petitioners had not furnished the bills of the materials used for each contract except the list of materials purchased, which were found to be not genuine or reliable by the Revisional Authority. Therefore, the assessment orders clearly disclose reliance on that material, which was found to be unreliable or not genuine. Hence, the argument advanced on behalf of the petitioners in this regard is untenable.
It is next argued by the learned Counsel for the petitioners that the orders made by the Joint Commissioner of Commercial Taxes (Administration) in the revisional proceedings are all cyclostyled or stereotyped orders and there is no proper application of mind to the facts of the case.
Perusal of the order in each of the cases makes it clear that there is clear application of mind to the facts arising in each of the case. When the complaint alleged against the petitioners for setting aside the assessment orders is identical and the defence set up by the petitioners is also identical, if identical orders are passed by the Revisional Authority, we do not think that the orders made by the Revisional Authority will be termed as either cyclostyled or stereotyped. Therefore, we find no substance in this contention also.
In the circumstances, having found no substance in any one of the contentions urged on behalf of the petitioners, we dismiss these petitions.