The tribunal's findings were upheld, confirming that the absence of proper documentation for goods in possession justified the imposition of penalties under the KVAT Act.

ORDER :

(Easwaran S., J.)

[OT.Rev Nos.83/2022 & 84/2022]

These revision petitions arise out of the common order passed by the Kerala Value Added Tax Appellate Tribunal, Ernakulam in TA(VAT) Nos.873/2018 and 395/2017, respectively.

2. The present revision petitions pertain to the assessment year 2013-14. The brief facts necessary for the disposal of these revision petitions are as follows:

On 29.10.2013, during the inspection of Quality Assay and Hall Marketing Centre (P) Ltd, M.G.Road, Ernakulam, the Intelligence Squad No.1, Ernakulam found two persons of Mahek Gold, Golden Plaza, 1^st Floor 93/95, Dhanji Street, Mumbai-400 003 with two bags containing gold ornaments weighing 20179.4 grams unaccompanied by any documents prescribed under Section 46(3)(e) of the Kerala Value Added Tax Act, 2003 ('KVAT Act', for short). The value of the ornaments was estimated to be Rs.5,85,20,260/- and a penalty of Rs.58,52,026/- was imposed under Section 47(6) of the KVAT Act. The assessee aggrieved by the order of imposition of penalty filed appeal before the first appellate authority, which was rejected against which an appeal, TA(VAT) No.873/2018, was preferred before the Kerala Value Added Tax Appellate Tribunal, Ernakulam. Subsequently, the assessing officer, the Commercial Tax Officer, 4^th Circle, Ernakulam initiated proceedings under sub-Section (3) of Section 22 of the KVAT Act calling for the books of accounts of the dealer to ascertain whether the detained gold was taken back to the State of Maharashtra as per the court direction. The dealer having failed to prove the same, the assessing authority presumed that the gold was sold in Kerala and accordingly, the suppressed turnover was computed at Rs.5,85,20,260/- and two times of the above amount was added to cover up the probable suppression and omission and arrived at a total turnover of Rs.21,06,72,936/- and thereby imposed a penalty of Rs.1,05,33,647/- together with interest at Rs.4,21,346/-. The order of assessment was also unsuccessfully challenged before the first appellate authority and thereby reaching the tribunal in TA(VAT) No.395/2017. The tribunal took up both the appeals jointly for consideration. The tribunal rejected the challenge to the imposition of penalty and modified the order of assessment by refixing the gross profit at 10% and the turnover addition was reduced to an amount equivalent to the turnover assessed. Aggrieved by the order of the tribunal, the assessee has preferred these revision petitions by raising the following substantial questions of law:

“Questions of law raised in O.T.Rev.83/2022

1. Whether under the facts and circumstances of the case, the Hon'ble Tribunal was correct in completing assessment under Section 22(3) of the KVAT Act and demanding VAT alleging sales suppression?

2. Whether under the facts and circumstances of the case, the Hon'ble Tribunal was correct in rejecting the certificate issued by an independent Chartered Accountant certifying that the ornaments weighing 20179.4 grams were received back in Mumbai office?

3. Whether under the facts and circumstances of the case, the Hon'ble Tribunal was correct in rejecting evidence furnished by the Revision Petitioner to substantiate that the goods were returned to Mumbai merely alleging that certain entries in the stock register were blackened out when the same were clearly visible in the original copy filed?”

“Questions of law raised in O.T.Rev.84/2022

- Whether under the facts and circumstances of the case, the Hon'ble Tribunal was correct in confirming the issuance of notice under Section 47(2) of the KVAT Act and imposition of penalty under Section 47(6) of the KVAT Act?

- Whether under the facts and circumstances of the case, the Hon'ble Tribunal was correct in concluding that transit of goods in a handheld bag requires compliance under Section 46 of the KVAT Act?

- Whether under the facts and circumstances of the case, the Hon'ble Tribunal was correct in rejecting the certificate issued by an indepe