TMI Blog1989 (8) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue got information that the assessee-firm purchased 525.95 quintals of pepper, valued at Rs. 11,89,940 in December, 1987, from M/s. Premier Spices, Hill Produce Dealers, Cochin, as per sale bills dated 27th December, 1987 and 29th December, 1987. Declarations in form No. 25, issued by the assessee-firm, were available with the sellers. On this basis, a provisional assessment was made for December, 1987, against the assessee. Similarly, for January, 1988, the Revenue got information that the assessee purchased black pepper for Rs. 26,53,820 from M/s. Alok Spices, Cochin. In view of the fact that the assessee had filed only a "nil" return, the assessing authority issued a notice as to why the purchase turnover aforesaid should not be brought to tax. The assessee conceded the above taxable turnover, by filing a return on 28th March, 1988. It also filed declarations in form No. 25 obtained from one M/s. Girish Traders. The assessing authority held that M/s. Girish Traders is a non-existent firm and rejected the declarations and brought to tax the above turnover in the hands of the assessee. For the month of February, 1988, the turnover conceded was Rs. 18,67,780. The assessee cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice on 5th April, 1988 and admitted orally that the declarations were false and that they were filed with intent to prolong the payment of tax till final assessments were completed. The partners of the firm also stated that they filed the declarations from non-existent dealers since their attempt to get the declarations from the existing dealers, was futile. This fact has been recorded in the assessment files and is available along with other papers and statements given by the partners. On the above facts, the assessing authority held that if the registration is allowed to continue, the assessee will further transact business culminating in huge loss of revenue to the State and in the interest of the revenue and the public good the registration granted under the Kerala General Sales Tax Act and Central Sales Tax Act should be cancelled to avoid further leakage of revenue. It was so done by order dated 18th April, 1988. 4.. In the appeals, filed before the Deputy Commissioner of Sales Tax, by order dated 8th July, 1988, the orders passed by the assessing authority were affirmed. The appellate authority held that in the instant case the assessing authority has made out a prima fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntail liability to taxation; that is not a "good and sufficient" reason to cancel the registration. 6.. Aggrieved by the common order passed by the Appellate Tribunal dated 26th September, 1988, in T.A. Nos. 436 and 437 of 1988, setting aside the cancellation of the registration certificates under the Kerala General Sales Tax Act and Central Sales Tax Act, the Revenue has come up in revisions. 7.. We heard counsel. The entire records were produced before us. The facts have been stated in detail in the preceding paragraphs. In our view, the Appellate Tribunal failed to understand the true scope of the power vested in the assessing authority under section 14(7) of the Kerala General Sales Tax Act and section 7 of the Central Sales Tax Act and also the Bench decision of this Court in Natarajan Chettiar's case [1988] 69 STC 153. The Appellate Tribunal totally failed to note that the declaration in form No. 25 filed for January, 1988, obtained from M/s. Girish Traders, was false. Similarly, the Appellate Tribunal ignored or failed to note that the declaration in form No. 25 filed for February, 1988, from M/s. Jupitor Traders, was false and the registration of M/s. Jupitor Traders, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, by the assessee-firm, counsel for the assessee submitted the reply in the negative. 8.. It is true that an admission made by a person is relevant, but not conclusive. It is open to a person, who has admitted a fact, to explain or clarify under what circumstances it was made or to prove that what was stated was untrue. In the absence of any denial or explanation therefor, an admission is almost conclusive regarding the facts contained therein. It dispenses with proof. In this case, the partners of the assessee-firm appeared before the assessing authority and admitted that the declarations filed are false and that they were filed with intent to prolong the payment of tax till final assessments are completed. They had also admitted that the declarations were obtained from a nonexistent dealer since their attempt to get declarations from the existing dealers, was futile. In the absence of any denial, explanation or clarification of the said admission, the particulars or facts stated therein are perilously conclusive, that the assessee wilfully filed false declarations with intent to withhold or delay the payment of lawful tax due. This seems to be the only reasonable conclusion po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the assessee filed a "nil" return, will not in any way deter the assessing authority to cancel the registration, if on the facts disclosed, the assessing authority is satisfied that the assessee is attempting to defraud the Revenue or otherwise acted wilfully to defeat or delay the payment of legitimate tax due to the Government. 10.. The Sales Tax Appellate Tribunal seems to have misunderstood the scope of the power of the assessing authority under section 14(7) of the Kerala General Sales Tax Act and under section 7 of the Central Sales Tax Act as also the Bench decision of this Court in Natarajan Chettiar's case [1988] 69 STC 153. The words "good and sufficient reasons" in the context of section 14(7) of the Act only mean "appropriate" or "suitable" or "satisfactory" or "fit" and "enough" or "adequate" reasons for cancelling the registration. Interpreting the said words, this Court held as follows: "The meaning of the words 'good and sufficient reasons' depends upon the context. In the context of the Sales Tax Act, the words 'good and sufficient reasons' occurring in section 14(7) should receive a reasonable interpretation, which will effectuate and render meaningful the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich will render it possible to achieve effective, speedy and proper implementation of the provisions of the Act and in particular appropriate measures to safeguard the interests of the Revenue. In this particular case, where a dealer himself has admitted that he had filed false declarations with intent to prolong or delay the payment of lawful tax due, and the said declarations were filed due to inability to get proper declarations from an existing dealer, Prima facie it can be stated that the dealer wilfully attempted to evade tax by filing false declarations and if in such a case the assessing authority cancelled the registration, it can certainly afford "good and sufficient reason" for cancellation of the registration certificate. The Sales Tax Appellate Tribunal was in error in distinguishing the judgment of this Court in Natarajan Chettiar's case [1988] 69 STC 153, by referring to a few isolated passages out of context and even without endeavouring to understand the ratio of the decision. This is also a clear legal error. This error has led to a wrong approach to the entire question and the resultant conclusion. 11.. For the above reasons, we set aside the common order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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