ORDER

Dated this the 20th day of January 2021 Bechu Kurian Thomas, J.

For the assessment year 2009-2010, alleging that the assessee had suppressed turnover of Rs.4,81,498/-, best judgment assessment was resorted to by the assessing officer and made an addition of 50% of the suppressed turnover. In appeal, the Appellate Authority found the best judgment assessment justified and directed the assessing officer to verify the documents and allow the input tax credit to the extent admissible. The assessee took up the matter in further appeal before the Appellate Tribunal. By the impugned order, the Tribunal though upheld the finding of purchase suppressions found the addition of 50% of the purchase suppressions to be improper since the rejection of accounts after verification was, after the close of the financial year concerned.

2. The department has come up in revision under Section 63 of the Kerala Value Added Tax Act, 2003 (for short, 'the Act'). The questions of law raised in revision on the basis of which admission was granted are as follows :-

1. Whether the Tribunal is justified in deleting the addition only for the reason that, the detection of offence was after the assessment year.

2. Whether the Tribunal is justified in deleting the addition when it is clearly found that, the assessee has purposefully evaded tax and it was unearthed only on verification of the documents by the assessing authority.

3. Whether the Tribunal is justified in upholding that, the assessment U/s. 25(1) is justified but deleting the addition without valid reasons.

4. Is it proper for the Tribunal to interfere with the assessment when it is clearly proved that, the assessee has suppressed the turnover so as to limit the turnover below the registerable turnover.

3. All authorities have come to the conclusion that the asssessee had suppressed purchases to the tune of Rs.4,81,498/-. Those conclusions by the statutory authorities have not been challenged by the assessee. The only question arising in this revision is as to whether the deletion of 50% of additions as directed by the Appellate Tribunal was justified in the facts and circumstances of the case.

4. In the Full Bench decision reported in V.Aboobacker v. State of Kerala [(2010) 27 VST 308 (Ker)] it was held that proof of purchase suppression leads to only one conclusion that the accounts are incomplete. If the accounts are found to be incomplete, it is unreliable and the recourse available to the assessing officer is to make a best judgment assessment. It was also observed that, while making best judgment assessment, the assessing officer should arrive at a conclusion without any bias and on a rational basis and that however, the assessing authority should not be vindictive or capricious and assessment should be made on a bona fide estimate and on a rational basis.

5. Relying upon the aforesaid observations, this Court had in O.T.R.No.224/2014 and connected cases upheld the addition of 25% to 50% in the respective cases.

6. With the above proposition of law in mind, we find that in the instant case, the Tribunal set aside the addition of 50% of the purchase suppressions to the total turnover, solely on the ground that the rejection of accounts was after close of the financial year concerned. The said finding was based upon the judgments of this Court which issues were considered again by this Court in OTR.No.224 of 2014. It is seen from the aforesaid judgment in OTR.No.224 of 2014 that after noting the pattern of suppression or detection of more than one suppression, additions of 25% or 50% as the case may be, were upheld by this Court.

7. A perusal of the impugned orders, especially the assessment order (produced as Annexure A) shows that the assessing officer had noticed the facts arising in the case and imposed 50% of the suppressed turnover as an addition. A reading of the assessment order shows that the assessing officer was justified in coming to the conclusion to make additions of suppressed purch