The condition imposed by the appellate authority vide Ext.P7 order dated 27.06.2014, directing the petitioner to satisfy 30% of the disputed liability, so as to avail the benefit of interim stay during pendency of the appeal, made the petitioner to approach this Court by filing the writ petition.
2. The petitioner is a registered dealer, who is a presumptive tax payer in terms of the relevant provisions of Section 6(5) of the KVAT Act, 2003. In respect of the assessment years 2009-10 to 2012-13, the petitioner submitted necessary returns and satisfied the tax. While so, notice under Section 25(1) of the KVAT Act was issued, for the reason that some of the purchases were omitted to be included in the returns. It was also proposed to impose penalty under Section 67 of the KVAT Act. It was then realised by the petitioner that, a mistake was occurred, because of wrong uploading of the 'Tax Index Number' by the sellers who affected sales to the 'sister concern' of the petitioner, who was also doing business almost in similar name (with slight difference) as that of the petitioner. Immediately, the matter was brought to the notice of the Assessing authority and all the 'Books of Accounts' were produced to substantiate the facts and figures. After considering the same, benefit was given only to a limited extent and the assessment was finalised as per Ext.P5 series orders, also adding turnover of `17.78 lakhs. The tax liability was worked out accordingly, which was quite onerous and unconscionable, being contrary to the actual facts and figures. This made the petitioner to approach the Appellate Authority by filing Ext.P6 series appeals, along with petitions for interim stay. After considering the I.A.s for stay, the appellate authority passed Ext.P7 order, correctness of which is under challenge in this writ petition.
3. The 1st respondent has filed a statement pointing out that, there is absolutely no basis for the case projected by the petitioner. Paragraphs 2 & 3 of the said statement which are relevant for the purpose of considering the issue involved in this case, are in the following terms.
“2. It is submitted that the petitioner, an petitioner on the rolls of this office, dealing in Electrical goods and Home Appliances, opted the section 6(5) of the KVAT Act 2003 during the fiscal 2009-10. In the annual return in form 10A filed, the petitioner disclosed a turnover of Rs.49,47,042/- which was under the turnover limit of Rs.50 lakh relating to the presumptive scheme. On scrutiny of the purchase effected by the dealer through the KVATIS, it was seen that 29 purchase invoices were omitted to account by the petitioner Detailed notice proposing to assess the unaccounted purchases, depending on the benefit of section 6(5) of the Act, had been issued to the petitioner. The petitioner filed his reply Ext.P2 on 09.10.2013 requesting to grant 28 days more time to file the reply. Requested time was granted vide this office adjournment notice dated 9.10.2013. Petitioner filed his reply on 23.10.2013 informing that one of the purchase invoices (No.310) was duly accounted and 18 numbers of purchase invoices relate to his sisters concern, M/s. Paravanparambil Home Appliances, Alakode (PIN 32742971204). The petitioner also informed that there occurred a mistake on the part of the selling dealer that they had wrongly uploaded the Registration Number of the petitioner instead of that of his sister concern, enclosing photocopies of the invoices concerned. The petitioner also requested 40 days time. Ext.P3 for permitting them to revise the return. The petitioner was again granted 30 days more time against his request of 40 days time to be heard in the matter. The true copy of the adjournment notice dated 24.10.2013 is produced herewith and marked as Annexure-R1(a). As directed in the adjournment notice the petitioner produced the complete books of accounts for the year 2009-10 in respect of his firm and that of his sister concern on 27.11.2013. Meticulous verification of the accounts of both the dealers revealed genuineness on the part of the petitioner on the aspect of mistake in the registration number uploaded by the sellers and an invoice accounted by him. But the petitioner was not able to prove the genuineness of the remaining 10 purchase invoices and those invoices remain unaccounted. Hence the assessment is finalised incorporating the unaccounted purchase demanding tax and imposing penalty for his illegitimate action.
3. It is submitted that the accounts in respect of the petitioner and his sister concern had been verified meticulously before finalizing the assessment for the year 2009-10. Out of the 29 numbers of purchase invoices, 18 numbers relate to his sister concern wrongly uploaded by the selling dealers) and one purchase invoice was duly accounted by the petitioner. I submit that the petitioner has no answer to the remaining 10 invoices that he failed to account and hence assessed. The assessing authority verified the transaction through the KVATIS and fully verified the accounts before finalizing the order. Besides sufficient time to prove the genuineness of the purchase was given to the petitioner. Still the petitioner was not able to prove the genuineness of 10 purchase invoices. The true copy of the details of 10 purchase invoices which were not accounted by the dealer or by sister concern is produced herewith and marked as Annexure-R1(b). The details of the sale affected to the petitioner's concern from other dealers obtained from the KVATIS is produced herewith and marked as Annexure-R1(c). The relevant details of the purchases uploaded by the petitioner's sister concern is produced herewith and marked as Annexure-R1(d).”
4. The learned Government Pleader submits that, though the petitioner has stated that they have produced all the relevant documents, the ledgers for the assessment year 2009-10 alone were produced. After verification, it was found that, only 18 transactions could reconcile with the records and with regard to 10 purchase invoices, there was absolutely no answer. In the said circumstances, the proceedings were finalised, which does not call for any interference, submits the learned Government Pleader.
5. Adv.Sri.K.Srikumar, learned Senior counsel appearing for the petitioner submits that all the relevant documents were produced by the petitioner and they were sought to be considered by the Appellate authority, specifically referring to the points raised in the 'memorandum of appeal'. The condition imposed by the Appellate Authority as per Ext.P7 is onerous and by virtue of the nature and extent of transaction, the petitioner is not in a position to satisfy the same. It is also pointed out that the relevant facts and figures have not been discussed by the Appellate authority, while passing Ext.P7 order and hence seeks for indulgence of this Court.
6. After hearing both the sides, this Court prima facie finds that, the discrepancy with regard to the disputed 10 invoices has not been successfully explained from the part of the petitioner. But this Court does not intend to express any opinion in this regard, as it is for the petitioner to substantiate the same before the Appellate authority, before whom, the appeals are pending. Considering the extent of liability now sought to be mulcted upon the petitioner, and the nature of the contention raised from the part of the petitioner with reference to the transactions of the 'sister concern' and also the successful turn out, at least to a considerable extent, with regard to many of the invoices, this Court finds it fit and proper to scale down the liability imposed as per Ext.P7. Striking a balance, this Court permits the petitioner to enjoy the benefit of interim stay during pendency of the appeal, on satisfaction of a sum of `3,00,000/- (Rupees three lakhs) within two weeks from the date of receipt of a copy of this judgment. Subject to this the revenue recovery proceedings, if any, shall be kept in abeyance for the time being.
The petitioner shall produce a copy of this judgment along with a copy of the writ petition before the concerned respondent for further steps.
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P.R. RAMACHANDRA MENON, JUDGE.
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