State of Kerala vs C.S. Sreekuttan

K. Vinod Chandran, J.—The above revision is filed by the State against the concurrent finding of the first appellate authority and the Appellate Tribunal. The respondent herein is the son and legal heir of the original assessee, one C.L Sreenivasan. The original assessee died on 31.6.2003. It was the case of the respondent that his late father had stopped the business with effect from 24.5.2003 and that the respondent re-commenced the business with effect from 27.5.2003. The respondent had commenced business with effect from 27.5.2003 in the name and style of Thriveni Collections while the business of his father was conducted in the name and style Thriveni Silks and Sarees. It is also admitted that the assessment of the respondent for the year 2003-04, i.e., more specifically for the period from 27.5.2003 to 31.3.2004 has already been completed by order dated 1.10.2004. Effectively the contention of the respondents before the first appellate authority as well as the Tribunal was that the respondent had been continuing the very same business after the death of his father by obtaining a fresh registration. The assessment of the respondent for the year 2003-04 was also completed. The Assessing Officer in Annexure A order notices that even assessment for the previous year, i.e.,2002-03, though completed ex-parte, was later modified on the production of the books of accounts by the son of the deceased dealer, i.e, the respondent herein. However, when notice was issued for completing assessment for the year 2003-04 with respect to the period beginning from 1.4.2003 to 30.6.2003, i.e. till the death of the registered dealer; no books of accounts were produced and hence best judgment assessment was resorted to. While resorting to best judgment assessment, the Assessing Officer had taken the closing stock of the business as on 31.3.2003 and added 20% GP for arriving at the turnover. The Assessing Officer also had made additions with respect to certain sale bills effected to Thriveni Collections. Before the first appellate authority the assessee produced books of accounts and after verifying the same it was found that the taxable turnover as per the books of accounts would only come to Rs. 22,820/- and the balance turnover is exempted by the reason of the same being second sales. The Tribunal confirmed the above findings of the first appellate authority.

Before us, the Revenue raised questions of law inter alia regarding the legality of the Tribunal having confirmed the first appellate order without verifying the closing stock. Both the first appellate authority and the Tribunal are competent to look into the facts and the first appellate authority having verified the closing stock and the books of accounts entered a finding of fact which was confirmed by the Tribunal. The contention of the Revenue before the Tribunal was that there was closing stock with respect to the business of the deceased dealer and the respondent having claimed to have continued the business has not disclosed any such opening stock. The specific contention of the respondent was that the turnover of the business carried on by his father was exempted by reason of second sale except with respect to the conceded taxable turnover of Rs. 22,820/-. It was this factual aspect which was examined by the first appellate authority and confirmed by the Tribunal.

When the matter came up for admission, we felt that there is absolutely no question of law involved in the above revision and on the persuasive submission made by the learned Government Pleader regarding the huge turnover that has been claimed as exemption on the ground of second sale; we directed production of assessment order with respect to the respondent, after he took over the business; for the year 2003-04 more specifically between27.5.2003 and 31.3.2004. The same was produced along with the statement on 14.6.2012 in which we notice that the entire turnover has been granted exemption as second sales.

We also notice that the closing stock of the business conducted by the deceased father was Rs. 42,84,987.90/- and sales are seen effected to Thriveni Collections that is the business started by the son on 27.5.2003, coming to Rs. 32,74,767/-. This dispels the contention that the closing stock of the earlier business is not reflected in the new business. The Revenue also raises a question of law as to propriety of the Tribunal having not remanded the matter to the Assessing Officer. We are afraid, we cannot comprehend why such a remand should be made especially when the first appellate authority as well as the Tribunal is competent to look into the facts. We also fail to understand how the said question can be considered to be a question of law. In the above circumstances, we are of the view that the order of the Tribunal does not give raise to any question of law and accordingly, the above revision is rejected in limine