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2019 (11) TMI 418 - KARNATAKA HIGH COURTEnhancement of turnover tax - suppression of turnover - Best judgement assessment - power to do re-assessment - HELD THAT:- Section 39(1) of the Act empowers the Prescribed Authority to do the re-assessment where the Prescribed Authority has grounds to believe that any return furnished which is deemed as assessed or any assessment issued under Section 38 of the Act understates the correct tax liability of the dealer - It may, based on any information available, re-assess, to the best of its judgment, the additional tax payable and also impose any penalty under sub-section (2) or sub-sections (4) and (5) of Section 72 of the Act and demand payment of any interest and shall issue a notice of re-assessment to the dealer demanding that the tax shall be paid within 30 days of the date of service of the notice after giving the dealer the opportunity of showing cause against such re-assessment in writing. It is not in dispute that the Assessee has admitted the suppression of turnover at the time of the Enforcement Authority inspecting the business premises of the Assessee. It is not once, but on two occasions the business premises of the Assessee was inspected. On both the occasions, it was detected by the Enforcement Authority that the Assessee had indulged in the practice of not accounting the sales in the regular books of accounts - The conduct of the Assessee in not maintaining the regular books of accounts would be good ground for the Prescribed Authority to enhance the turnover including the deficit in stock noticed at the time of inspection. The questions of law raised by the petitioner requires to be answered against the Assessee and in favour of the Revenue. Levy of penalty u/s 72(2) of the Act - HELD THAT:- The penalty levied at ₹ 1,00,631/- under Section 72(2) of the Act requires to be re-considered in view of the return filed by the petitioner for the tax period September, 2013 disclosing the sales turnover detected by the enforcement authority. Hence, penalty under Section 72(2) of the Act has to be redetermined by the Assessing Authority - matter remanded to the Prescribed Authority to redetermine the penalty levied under Section 72(2) of the Act. Decided partly against assessee and part matter on remand.
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