9911796707
TMI Blog2021 (3) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... rder. 2. Brief facts of the case is that the respondent - concern is a registered dealer under the provisions of the Karnataka Value Added Tax Act, 2003 (for short `Act, 2003'). As per the Registration Certificate records, the main business place is at No.352-A, 1st Stage, 3rd Phase, WOC Road, near Pushpanjali Theatre, Shivanagar, Bangalore - 10 and additional place of business declared is 353-A, 6th Cross, 3rd Phase, near Pushpanjali Theatre, Kalyana Mantapa Road, Bangalore-10. The respondent was dealing in decorative lamination sheets, particle boards and wooden beadings during the tax periods 2005-06 and 2006- 07. The Deputy Commissioner of Commercial Taxes (Enforcement)-2, South Zone, Bangalore has inspected the business premises of the respondent on 31.10.2006 and seized certain documents and passed a seizure and mahazar order and subsequent to the inspection, the Commissioner of Commercial Taxes issued assignment to the Prescribed Authority to undertake re-assessment of the respondent for the tax period from April, 2005 to October, 2006. Accordingly, after issuing the proposition notices and considering the objections filed by the assessee, the Prescribed Authority has passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified in giving a legal entity to Sri Santhosh Jha, who's transaction was a benami transaction of the Assessee? (3) In the facts and circumstances of the case, whether the entire turnover detected at the time of inspection was the suppressed turnover of the Assessee? (4) In the facts and circumstances of the case, whether the Tribunal was right in modifying and re-fixing the suppressed turnover without any valid basis? (5) In the facts and circumstances of the case, whether the Tribunal was right in giving a finding that the turnover of the other parties were wrongly included in arriving at the suppressed turnover of the Assessee though the said parties were de-registered and the documents of those parties were in the possession of the Assessee and has paid the sale consideration amount towards the said transactions? 5. We have heard the learned counsel for the parties to the lis. 6. Sri Vikram Huilgol, learned Additional Government Advocate appearing for the petitioners - State contended that the impugned order passed by the Tribunal allowing the appeal in part and directing the Prescribed Authority to recompute the taxable turnover on the basis for the tax periods from Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside and he sought to allow revision petitions. 8. Per contra, Sri K J Kamath, learned counsel appearing for the assessee-respondent sought to justify the impugned order passed by the Tribunal and contended that admittedly the finding of fact recorded by the Joint Commissioner of Commercial Taxes (Appeals)-2, Bangalore that the volume of the documents seized by the respondent as well as 3138 written pages of information is contained in the various seized documents. These documents were seized on 31.10.2006. The processing of these documents was taken up by the respondent between 10.6.2010 and 11.8.2010 on 37 different dates, and the details of verification of seized documents were recorded by the respondent in 253 processing sheets of verification of seized documents. The details relating to the suppressed turnovers arrived at from the remaining seized documents are not disclosed to the appellant in the said notice, with the result that the assessee was effectively disabled from offering any meaningful explanation in relation to such estimates in the pre-assessment notice. Inspite of written request by the assessee, the Assessing Authority did not furnish copies and there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises and inspection of the regular books of accounts from the premises of assessee at No.352/A, 6th Main, 3rd Phase, 60 Feet Road, Thimmaiah Road, manjunathnagar, Bangalore-10, to the third party premises, mixed it up with the third party books and drawn a single mahazar and seizure order for both the premises. In spite of the said objection, the Authorities proceeded to pass the assessment order. Therefore, the assessee was forced to file KVAT.AP.723 TO 741/11-12 before the Joint Commissioner of Commercial Taxes (Appeals)-1, Bangalore (1st Appellate Authority) specifically contending that the impugned order passed by the Prescribed Authority is barred under the provisions of Section 40(1) of the KVAT Act, 2003 and Section 40(2) of the KVAT Act, 2003 contending that the impugned common re-assessment order, which inter-alia also relate to the tax period from April 2005 to October 2006 has been passed on 18.4.2011 after the amendment to Section 40(1) of the KVAT Act 2003 reducing the limitation period to four years from the end of the concerned tax period, such amendment is applicable to the impugned re-assessment order and that under the said amended provisions, the impugned re-a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uate opportunity to furnish his explanations and therefore, such defect in the impugned re-assessment order is cured at the appellate stage. In terms of the judgment reported in 44 STC 94 (Ker) and 34 STC 197 (Mad) a legally valid presumption can be raised to the effect that the documents seized from the business premises of any particular dealer relate to that particular dealer. The burden is on such dealer otherwise. But in terms of the judgment of the Hon'ble Supreme Court in case of State of Kerala-v- M.M.Mathew and Another reported in 42 documents effected from the a place which does not belong to the dealer against whom such documents are to be used for assessment or re-assessment purposes. The Hon'ble Supreme Court has observed as follows in the aforesaid judgment. There is absolutely no evidence on record to prove that the secret books of account, seizure of which was effected by or under the orders of the Inspecting Assistant Commissioner, were recovered from a place which formed part of the business premises of the respondents or was in their exclusive possession and control. The members of the inspecting party themselves have admitted that the books were lying on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal considering the pleadings of the parties has raised the following issues for consideration: Issues:- (1) Whether it is reasonable and justified on the facts and circumstances of these cases to pass a single seizure order in respect of the documents seized from two different premises belonging to two different persons who are not directly connected with each other without mentioning which document is seized from which place? (2) Whether it is reasonable and justified on the facts and circumstances of these cases to treat the transactions recorded in the documents seized from a third party (Sri Santosh Jha) as the transactions of the appellant without there being any indication to such effect in such seized documents against such of the entries relating to such transactions? (3) In the circumstances where a large number of purchase transactions reflected in the seized documents have been treated as the appellant's suppressed turnover and simultaneously when a large number of sales turnovers reflected in such documents have also been considered as suppressed turnover without treating any part of such suppressed sales turnover to be from out of the suppressed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bit number Appellant's accounted turnover C-1 64,41,558 H-2 3,16,66,306 J 1,25,06,301 Total accounted turnover of the appellant which is reflected in the documents seized from Sri. Santosh Jha's premises and the words 'SM' or 'Shyam Mica' are marked against the relevant entries in the seized documents. 5,06,14,165 B. Exhibit number Alleged suppression J 10807988 Total of the entries in Santosh Jha's documents treated as the appellant's suppressed turnover 10807988 After excluding the above transactions in the documents seized from Sri. Santosh Jha's premises, there are transactions recorded in those documents which total up to Rs. 5,11,25,591-00 against which some other code names other than that of the appellant are recorded or in respect of which there is no mention at all of any name in the seized documents. There is no sensible reason as to why any part of such transactions should be treated as the appellant's suppressed transactions. Nevertheless, without furnishing any tenable reason whatsoever, the FAA has treated 40% of the aforesaid extraneous transactions of Rs. 5,11,25,591-00 as the appellant's suppressed turnover (such suppressed turnover based on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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