The State of Tamilnadu vs Tvl. Punjab Crockery House Pvt. Ltd.

K. Raviraja Pandian, J.—The revision is at the instance of the revenue challenging the order of the Sales Tax Appellate Tribunal dated 3rd

December 2002 made in Tax Appeal No. 458 of 2001.

The material facts culled out from the statement of facts in the memorandum of grounds of revision is as follows:

The assessee Tvl. Punjab Crockery House Pvt. Ltd., have reported a total and taxable turnover of Rs. 2,89,54,650.37 and Rs. 32,79,888.35

respectively for the assessment year 1998-99 under Tamil Nadu General Sales Tax Act, 1959 and claimed exemption on a turnover of Rs.

2,56,74,962.02 representing the second sales of crockery items and other single point goods and discount allowed. The place of business of the

dealer was inspected by the Enforcement Wing Officers and found certain defects besides recovery of records ie., D7 records. 13 Cash bill books

relating to exhibition sales as the dealers had effected cash sales at the exhibition held at Guild of service, Chennai 8 were also seized. Based on the

seized materials, the Enforcement Wing Officials prepared a proposal, which was sent to the jurisdictional Assessing Officer for further action. In

the proposal, it was found that there was stock discrepancy at Rs. 2,33,319/- and gross profit over it at 10.8% totalling Rs. 2,58,571/- and

worked out the actual sales suppression Rs. 4,00,973/- and ordered further sum for probable suppression and the total sales suppression arrived

at Rs. 6,59,490/- and equal addition has been made for another like sum. The Assessing Authority estimated the total sales suppression at Rs.

13,18,980/- and taxable at 16%. The assessment was finally framed on a total and taxable turnover of Rs. 3,02,73,631/- and Rs. 45,98,868/-.

The assessee aggrieved by the addition of sales suppression in a sum of Rs. 13,18,980/-filed an appeal before the Appellate Assistant

Commissioner, who partly allowed the appeal and partly remanded the matter. The assessee carried the matter on further appeal to the Sales Tax

Appellate Tribunal disputing the turnover of Rs. 2,58,517/- at 16% being the stock discrepancy worked out at the time of inspection and for

cancellation of the penalty on the turnover sustained by the Appellate Assistant Commissioner. The State also filed a cross appeal disputing certain

other turnover and the consequential penalty u/s 12(3)(b) of the Tamil Nadu General Sales Tax Act.

As against the order passed in the assessee''s appeal, the present revision is filed by the revenue by formulating the following questions of law:

Whether in the facts and circumstances of the case, the Tribunal being the final fact finding authority has failed to appreciate the material facts by

application of independent mind?

Whether the Tribunal is correct in law in having deleted actual suppression with equal addition made on the exhibition sales which were not

accounted for by the assessee till the date of inspection carried out on 27.10.98?

Whether the order of the Tribunal in having deleted the consequent penalty is legally sustainable

We have heard the argument of the learned Counsel for the petitioner.

The only point which was canvassed is the correctness of the deletion of the equal addition made by the Assessing Officer and deleted by the

Tribunal in a sum of Rs. 4,00,973/-. This represents the difference of exhibition sale by the assessee.

It could be seen from the order of the Tribunal that the assessee has accounted for all the sales made at the exhibition subsequent to the

inspection and there was delay in accounting the sales at the exhibition; that they were reporting the turnover to the department after completion of

exhibition and that immediately after the inspection, the sales conducted at the exhibition on approximate basis has been included in the books of

accounts and offered for tax by filing necessary returns. At the end of the year, the assessee has included the difference of the actual turnover

relating to the exhibition sale and the turnover offered on approximate basis and paid the tax within the time fixed by the statute. In addition to that,

for the purpose of conducting the exhibition sale, the assessee obtained a temporary registration from the department and paid the fee on

25.09.1998. This action of the assessee getting the registration certificate for the purpose of conducting the exhibition sale is manifested that the

assessee is not having any intention to suppress the exhibition sale. The exact sale amount has not been incorporated in the books of accounts for

the reason that the inspecting authority has taken away their cash book, bill books and other books at the time of inspection, which has been stated

to be conducted on 27.10.1998.

When the entire amount of exhibition sale has been reflected in the books of accounts and offered for taxation, we are of the view that the

Tribunal has correctly come to the conclusion that there is absolutely no necessity to warrant for making equal addition in a sum of Rs. 4,00,973/-

towards exhibition sale, which otherwise amount to penalise the dealer who offered the entire sale for taxation by maintaining books and other

accounts, however belatedly incorporated the sales for valid reason. Hence we find the revision is liable to be dismissed and the same is dismissed.