IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR &

THE HONOURABLE MR. JUSTICE EASWARAN S.

TH TUESDAY, THE 28 DAY OF JANUARY 2025 / 8TH MAGHA, 1946 OT.REV NO. 58 OF 2023 AGAINST THE ORDER DATED 20.04.2022 IN TA(VAT) NO.306 OF

2016 OF KERALA VALUE ADDED TAX/AGRICULTURE INCOME TAX AND SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, THIRUVANANTHAPURAM REVISION PETITIONER(S)/RESPONDENT :

STATE OF KERALA, REPRESENTED BY THE JOINT COMMISSIONER OF STATE (LAW), DEPARTMENT OF KERALA GOODS AND SERVICE TAX, ERNAKULAM, PIN - 682011 BY ADV. V.K.SHAMSUDHEEN, SR. GOVERNMENT PLEADER RESPONDENT(S)/APPELLANT :

SMT. JOLLY EAPEN, XXII/402, 405, EDAKKODE, M/S. JOLLY FOOD PRODUCTS, THIRUVALLA, PIN - 689101 BY ADVS.

SANTHOSH P.ABRAHAM V.V.GEORGEKUTTY THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR ADMISSION ON 28.01.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ORDER ‘C.R.’

Easwaran S., J.

This O.T. Revision is preferred by the State aggrieved by the order of the Kerala Value Added Tax/Agriculture Income Tax and Sales Tax Appellate Tribunal, Additional Bench, Thiruvananthapuram in T.A.(V.A.T.) No.306 of

2016 dated 20.4.2022.

2. The facts in brief for disposal of the revision are as follows:

The assessee is a registered dealer of bakery products. The annual return submitted by the assessee for the assessment year 2010-2011 was interfered by the assessing authority, pointing out that there was turnover suppression detected by the intelligence officer and purchase variation. Accordingly, the assessment was completed as per order dated 22.1.2015 demanding additional tax and interest. Aggrieved by the order of assessment, the assessee filed an appeal before the Deputy Commissioner (Appeals). By order dated 13.7.2016, the appellate authority modified the order of assessment in relation to the addition towards probable omission, rate of tax and credit of tax paid. However, the assessee, aggrieved by the order, approached the appellate tribunal by preferring the appeal. Before the tribunal, it was contended by the assessee that the inspection conducted in the business premises of the appellant detected a turnover suppression of Rs.1,32,14,554/- and, on verification of the return and accounts revealed a purchase variation to the tune of Rs.1,33,600/-. The intelligence officer erroneously estimated the turnover suppression and added two times to the conceded turnover as part of the assessment. It was further contended that the amount covered by turnover suppression, as detected by the intelligence officer, included estimated turnover which is not permissible while calculating the actual suppression in a penalty proceeding. Out of Rs.1,32,14,554/-, a sum of Rs.8,53,147.50/- was added by way of mere estimation by the intelligence officer by stating that the same is added since equal amount for suppression by not producing the stock register of the raw materials and manufacturing stock register. The appellate tribunal, on considering the contentions of the assessee, held that a sum of Rs.8,53,147.50/- is liable to be excluded from the turnover assessed in connection with the proceedings of the intelligence officer. As regards the probable omission and suppression under the heads ‘suppressed turnover detected in inspection’ and ‘turnover related to purchase variation’, the tribunal limited the addition to 50% of the original turnover in tune with Section 25AA of the Kerala Value Added Tax Act (for short, ‘KVAT Act’). It is aggrieved by these findings that the State has come up with this revision by raising the following substantial question of law.

1. Whether, on the facts and circumstances of the case, the Appellate Tribunal has erred in law in directing to exclude the turnover of Rs.8,53,147.50, particularly considering the fact that assessee had admitted suppression of said turnover as evidenced by Annexure A proceedings?

2. Whether on the facts and circumstances of the case Appellate Tri-

bunal has erred in law