The taxation of turnover already assessed in previous sales is exempt from tax, contingent on the proof of the first sale.

J U D G M E N T

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Dr. A.K.Jayasankaran Nambiar, J.

These S.T.Revisions are filed by the revision petitioner aggrieved by the common order dated 08.12.2020 in T.A.Nos 1/2012, 2/2012 and 42/2015 before the Kerala Agricultural Income Tax and Sales Tax Appellate Tribunal, Additional Bench, Ernakulam. As the revision petitions impugn the common order of the Tribunal, they are taken up for consideration together and dispose by this common judgment.

2. The brief facts necessary for disposal of these revision petitions are as follows:

The revision petitioner-assessee was a dealer in wheat, rice and pulses and registered as such on the roles of the Commercial Tax Officer, Tripunithura. The issues involved pertain to the assessment years 1998-99, 1999-2000 and 2000-2001 under the KGST Act .

3. The place of business of the revision petitioner was inspected by the Investigating Branch of Intelligence Wing of the Sales Tax Department on 02.02.2001, based on which, an allegation was made regarding evasion of tax by the revision petitioner by claiming exemption on second sales of scheduled goods against bogus purchases. The returns and books of accounts filed by the revision petitioner on the various assessment years was rejected by the assessing authority and the assessment was completed on best judgment basis. The balance taxable turnover determined assessing authority for the various years was as follows:

1998-1999 - Rs.59,64,25,590/- 1999-2000 - Rs.45,49,90,320/-

2000-2001 - Rs.4,31,08,329/-

4. The figures of taxable turnover determined as above were arrived at after adding to the conceded turnover. The suppressed turnover detected by the department and thereafter estimating the actual turn over for the purposes of completing the assessment.

5. The revision petitioner carried the assessment orders in appeal before the Deputy Commissioner of Appeals, who directed a modification of the assessment order, on finding that the revision petitioner was in fact entitled to claim the second sale exemption in respect of purchases effected from the registered dealers in the State. In further appeals carried by the State before the Appellate Tribunal, however, the Tribunal set aside the order of the First Appellate Authority and restored the assessment orders for all the three years.

6. The revision petitioner thereafter filed revision petitions before this Court, which set aside the orders of the Appellate Tribunal and remanded the matter to the Appellate Tribunal for a fresh consideration. While doing so, this Court found that the finding of the Appellate Tribunal that in as much as the revision petitioner had compounded the offence relating to non maintenance of true accounts, he would not contest the findings of irregular claim for exemption in respect of second sales in the assessment proceedings, was not justified in view of the decisions inVelimparambil Hardwares v. State of Kerala [(1994) 92 STC 98 and also in Yeses International Bharath Petroleum Corporation v. State of Kerala [2008 (4) KHC 79] .

7. In the remand proceedings before the Appellate Tribunal, the main issue that arose for consideration was essentially as to whether the claim of the revision petitioner- assessee for exemption towards second sale of goods purchased from M/s.A-One Traders, Vadanapally and M/s.Star Trading, was legally sustainable. The Appellate Tribunal found that the revision petitioner did not produce any books of accounts or records before it to prove the alleged first sale by the two firms mentioned above, from whom the revision petitioner stated that he had purchased the goods which were then resold by him. The Tribunal went on to observe that the nature and mode of invoices involving huge quantities in a single invoice was suggestiv