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2008 (4) TMI 698 - HC - VAT and Sales TaxAddition on account of unaccounted inter-State purchases Held that:- The decisions of the Division Benches in Surya Agencies v. State of Kerala [2003 (8) TMI 524 - KERALA HIGH COURT] and C.O. Varghese v. State of Kerala [2003 (2) TMI 474 - KERALA HIGH COURT] restricting addition on account of suppression of inter-State purchases only for the value of actual suppression noticed is not correct law. We therefore overrule this view expressed by the Division Bench in the above two decisions. We further declare that once the accounts are found to be incomplete or incorrect on account of material defect found by the Department, such as purchase or sales suppression, whether it is local or inter-State, the assessing officer is free to reject the books of account and proceed for estimation of turnover in accordance with the principles laid down in section 17(3) of the Act and the law declared by High Courts and Supreme Court. Since the petitioners have raised other issues particularly the reasonableness of the additions, we feel the cases should go back to the Division Bench for considering these issues. We accordingly remit the cases to the Division Bench for decision on other issues consistent with the law declared above.
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