TMI Blog2015 (9) TMI 1393X X X X Extracts X X X X X X X X Extracts X X X X ..... onsider the question relating to the estimation made by the assessing officer in relation to the fact that the assessee has no local sales at all and therefore the turnover estimated under section 6(1) of the Act is bad in law, the same is required to be considered in accordance with the procedure prescribed. - Impugned order is set aside - Matter remanded back - Decided in favour of assessee. - O. T. Rev. No. 1 of 2013 - - - Dated:- 11-4-2014 - DR. MANJULA CHELLUR C. J. AND SHAFFIQUE A. M., J. K. P. Abdul Azees and Smt. C. Amrita for the petitioner. Bobby John Ambooken, Government Pleader, for the respondent. JUDGEMENT This revision is filed by the assessee against the order dated October 22, 2012 in T.A. (VAT) No. 398 of 2012 of the Kerala Value Added Tax Appellate Tribunal, Ernakulam. The issue relates to the assessment year 2005-06. 2. The petitioner is a dealer in coconut and arecanut. According to him, during the period 2005-06, he purchased arecanut from unregistered dealers under section 6(2) of the Kerala Value Added Tax Act (hereinafter referred to as the KVAT Act''). Produce was sent to agents outside the State of Kerala for consignment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the authorities below did not consider the said provision while upholding the order passed by the assessing officer. The revision petitioner has raised the following questions of law:- (a) Is not the order of the Tribunal a perverse order by holding that the issue with regard to the legality of the estimation towards suppression on local sales under the Kerala Value Added Tax Act, 2003 on the basis of offences detected on the transaction under the Central Sales Tax Act was not raised before the lower authorities when there are clear materials to the effect that this issue was raised before the first appellate authority? (b) Is not the Tribunal wrong in holding that an issue which was not raised before the lower authorities cannot be raised before the Tribunal first time? (c) Has not the Tribunal, committed an error of law in holding that the assessment made under section 24 of the Kerala Value Added Tax Act, 2003 is sustainable when omission or suppression has been detected only on transactions under the Central Sales Tax Act and no omission and suppression has been detected on local sales liable to tax under the Kerala Value Added Tax Act, 2003? (d) Has not the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter referred as the KVAT Rules ) which reads as under:- 39(5)(i): Where in an audit under section 23, any irregularity as specified under sub-section (1) of section 24 is detected and such irregularity relates to one return period only and does not disclose any pattern of suppression, the best judgment assessment shall be limited to the return period to which the irregularity relates. .... 39(5) (iii): Where the irregularity relates to suppression of taxable turnover and a pattern of suppression is clearly made out, the best judgment assessment shall be in respect of all the return periods to which the pattern is applicable. 11. The learned counsel for the assessee relied upon the judgment of this court in Bhavani Tea and Produce Co. Ltd. v. State of Kerala: [2003] 132 STC 563 (Ker) wherein a Division Bench of this court held that when the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised. The Division Bench relied upon the judgment of the Supreme Court in State of Kerala v. Cardamom Planters' Association: [198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intercepted by the Commercial Tax Inspector of the sales tax check-post, Tholpetty on May 7, 2005, the vehicle contained excess quantity of 43 bags of tender arecanuts over and above the quantity declared in the delivery note and permit. This fact cannot be disputed. The assessing officer observed that the modus operandi practised by the assessee throughout the year was transportation of materials in excess of the quantity permitted as per the delivery note. It is stated that the quantity transported in excess was three times the conceded quantity. Further, it is observed that compared to the market value of raw arecanuts, the price conceded by the dealer per nut was very low. Therefore, it was observed that, in the absence of filing F form declaration for March 2006, the turnover involved has to be treated as inter-State sales and assessed under the Central Sales Tax Act at 10 per cent. It was in this background that the returns filed by the dealer was rejected and best judgment assessment was made under section 24 of the Act. However, the first appellate authority observed that when the suppression detected was only ₹ 99,050, the addition of ₹ 4,31,29,920 was excessiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 24 of the KVAT Act, when the omission or suppression is detected only with reference to transactions under the CST Act. Apparently this is the issue which ought to have been considered by the Tribunal. But the Tribunal proceeded on the basis that the assessee was in the habit of transporting goods much more than the quantity declared in the transporting documents and he had undervalued the goods. Hence assessment under section 24 of the KVAT Act was sustainable. This, according to us, is a question to be considered taking into account the overall factual situation in the case. According to the assessee, he has no local sales. No local sales is detected by the Intelligence Officer. All the goods were transported through check-posts and twice it was detected that the quantity transported was in excess of the quantity specified in the delivery note. In so far as the assessee had transported his goods only through check-post, one cannot assume that at all point of time he had transported goods much more than the quantity declared. It is relevant to note that the first appellate authority found that considering the suppression detected, the addition made did not have a rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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