Tribunal cannot disregard documents verified by Appellate Authority with departmental input; such findings perverse if ignored.

(Order of the Court was made by N. ANAND VENKATESH,J.)

This Tax Case Revision has been filed under Section 38 of the TNGST ACT, 1959 r/w Rule 30 of the TNGST Rules, 1959, against the order passed by the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench) Madurai, dated 20.09.2022 in Madurai Tribunal State Appeal No.162 of 2009.

2. The case of the petitioner is that they are the manufacturer and dealer in printing machines and an assessee on the file of the Commercial Tax Officer, Thirupparankundram Circle, Madurai. An inspection was conducted by the Enforcement Wing on 18.08.2005 and the officers were able to find some defects and accordingly, arrived at a stock difference to the tune of Rs.12,24,023/-. They also added 16.38% towards gross profit and arrived at the sales suppression at Rs.14,28,518/-. They further recovered 16 slips of papers allegedly containing business transaction and other books maintained in the place of business by issuing D-7 receipts.

3. A show-cause came to be issued to the petitioner and the petitioner also gave a reply. The Assessing Officer passed an order of assessment dated 24.08.2007 and mulcted the petitioner with a tax liability of Rs.6,78,730/- surcharge of Rs.33,758/- and penalty of Rs.3,15,133/-.

4. The petitioner aggrieved by the assessment order, filed an appeal before the Appellate Assistant Commissioner (CT), Madurai. The First Appellate Authority, after hearing both sides, passed an order dated 03.06.2008 deleting the entire actual suppression of Rs.14,28,518/- arrived at towards the stock variation, but, confirmed the entire actual suppression of Rs.5,43,945/- arrived at towards D-7 slips. The Appellate Authority further deleted the equal time addition made thereon, but, upheld the levy of the tax under Section 3(4) of the TNGST Act and refixed the penalty at Rs.59,972/-. Insofar as the petitioner is concerned, the order had become final and no further appeal was filed.

5. However, the Department preferred an appeal before the Tamil Nadu Sales Tax Appellate Tribunal, Madurai. The Tribunal by the impugned order dated 20.09.2022, set aside the order passed by the Appellate Authority and allowed the appeal and restored the order that was passed by the Assessing Officer and also directed the Assessing Authority to work out the penalty. Aggrieved by the same, the present Tax Case Revision has been filed.

6. This Tax Case Revision was admitted on 08.03.2023 and notice was ordered. However, no question of law was framed. After service of notice, the matter was listed for hearing today and this Court after hearing both sides, framed the following questions of law.

“(a). Whether the Appellate Tribunal is correct in setting aside the order of the First Appellate Authority which was passed after considering all the records available on the files and the documents produced by the petitioner at the time of hearing in support of their case and verified by the Departmental representative and by following the orders passed by the Sales Tax Appellate Tribunals at Chennai and Madurai?

(b).Whether the Appellate Tribunal is correct in ignoring the plea of the petitioner that the inspecting officers did not take the actual stock into consideration but only adopted money value for purchases, sales and of the stocks and added uniform Gross Profit to arrive at the alleged stock discrepancies which is not a correct method as held in various judgments?

(c).Whether the Appellate Tribunal is correct in ignoring the ratio laid down by this Court in the case of State of Tamil Nadu Vs. Jalaram Timber Depot in Tax Case (Revision) (MD).No.100 of 2012 dated 11.10.2012 which categorically held that adopting money values for purchase