(Made by B.RAJENDRAN,J.) The State Government has come forward with this revision as against the order passed by the Sales Tax Appellate Tribunal, dated 18.11.1998.
2. The assessee, who is a dealer in G.I. Pipes had submitted its return for the assessment year 1994-95. There was a dispute in regard to the stock variation of Rs.3,72,162/-, which was noticed at the time of inspection by the authorities on 21.01.1995 and the corresponding levy of tax, surcharge and additional sales tax were in dispute. The assessee also disputed the levy of penalty of Rs.1,06,517/- under Section 12(3) of the Act, which was levied by the Assessing Officer. Aggrieved against the order levying penalty and additional sales tax, the respondent-assessee preferred an appeal before the Appellate Assistant Commissioner in Appeal No.610/94. The Appellate Authority by an order dated 02.04.1997 has deleted the equal addition made on turnover to the tune of Rs.3,59,251/- and ultimately, the taxable turnover of the assessee was refixed at Rs.20,80,442/- and the consequently, the penalty under Section 12(3)(b) of the Act was refixed at Rs.17,864/- levying separately under each Act. The assessee against the order of the Appellate Assistant Commissioner preferred an appeal before the Tribunal in AP.No.245 of 1997 and the Revenue also filed an enhancement petition in TMP.No.171 of 1997, which were taken up jointly and a common order was passed by the Tribunal on 18.11.1998. The Tribunal, after elaborately considering the details, came to the conclusion that no further addition is required for the stock variation arrived at by the trading account method and following the decision of this Court reported in 103 STC 543, they concluded that no further addition is required in this case and accordingly, set aside and deleted the addition of equal amount of Rs.1,86,081/- and allowed that portion of the appeal and as far as the enhancement petition is concerned, they rejected the claim for the restoration of turnover of Rs.7,18,502/- in the enhancement petition and the consequential levy of tax, surcharge, additional sales tax and penalty and in the result, the appeal was modified and the enhancement petition was dismissed. Aggrieved against the modification and the deletion of the equal addition amount, the Revenue has filed the above revision.
3. We have heard the learned counsel appearing on either side and perused the materials available on record.
4. The questions of law that were raised by the petitioner, are as follows:
"i. Whether in the facts and circumstances, the Tribunal is legally correct in deleting the equal time addition of turnover even while having sustained the turnover of actual suppression?
ii. Whether in the facts and circumstances, the Tribunal is right in deleting the consequential penalty levied under Section 12(3)(b) of the TNGST Act?"
5. We have carefully verified the order of the Assessing Authority in regard to the equal addition made by the Assessing Authority. The Assessing Authority in his order had stated that notice was given to the assessee calling for objections and only after considering the objections, the order was passed. Unfortunately, we are unable to see even one line or any finding for inclusion of addition of equal amount for the alleged omission. In the Assessing Authority's order, after the alleged conclusion, it has been stated as follows:
Taxable turnover proposed to be determined.
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6. In the assessment order, a mere addition was made in the last column making an equal addition without giving any reasoning at all. In fact, the Assessing Authority is a quasi judicial authority, who has to give reasons for his finding. Neither any analysis nor any evaluation was made, but straight-away, this equal addition was made without giving any reason at all. Contrary, the assessee had given ample documents, made objections, but nothing was considered or no opportunity was given to him to put forth his explanation in regard to the equal addition at any point of time.
7. Even the Appellate Assistant Commissioner has not given any finding in regard to the equal addition and the relevant prtion of the order is extracted as under:
"In this case, the inspecting officials though not derived variation based on physical verification, they have obtained such difference by means of trading account method, wherein the particulars are verified with reference to the correct figures taken out from the accounts of the appellants. The figures adopted in such workings were not at all incorrect as argued by the appellant in this case. Therefore, stock difference arrived in this case could not be treated as incorrect one. Therefore, assessment made on stock difference noticed in the place of business and its equal addition is sustained.
8. The order of the Appellate Assistant Commissioner is also an order without applying principles of natural justice, as no reason was given for his findings. The authorities, who are all quasi judicial authorities, should exercise their function in the manner known to law. Having given a clear finding both on facts and on law, he has to give reasons to sustain such equal addition, especially when the Assessing Officer had not at all given any reason and simply had adopted equal addition system without any basis. Aggrieved against the order of the Appellate Assistant Commissioner, the assessee filed an appeal before the Tribunal. The Tribunal has gone into detail in so far as this point of stock variation is concerned and has come to a clear conclusion, which reads as follows:
"11. Coming to the addition of equal amount for probable omission, the argument of the appellants that there is no subsequent inspection during 1994-95 and there is no continuous pattern of suppression or similar pattern of suppression involved in arriving the stock variation noticed at the time of inspection is well founded because of the fact that the stock variation was only arrived after taking into consideration of the opening stock as on 01.04.1994, purchases and sales upto the date of inspection, which is the cumulative effect of alleged suppression right from the period from 01.04.1994 to till the time of inspection. Moreover, the stock variation was arrived only on the basis of money value of the goods and not on the quantitative basis. Under the above circumstances, we feel that no further addition is required for the stock variation arrived by the trading account method. It is rightly held by the Hon'ble Madras High Court in the case of T.Singaravelu reported in 103 STC 543 that in the absence of any continuous pattern of suppression or similar pattern of suppression or in the absence of any brought forward entries, the further addition for the estimated suppression for probable omission cannot be made. Hence, following the principles held by the Hon'ble Madras High Court in the case referred supra, we are of the view that no further addition is required in this case with reference to the circumstances stand above. Accordingly, we set aside and delete the addition of equal amount of Rs.1,86,081/- and allow this portion of the appeal."
9. The Tribunal has, therefore, rightly applied its mind, verified the contents, compared the details and finally given a finding that the stock verification was arrived at only on the basis of money value of the goods and not on the quantitative basis, which has not at all been taken into consideration either by the Assessing Officer or the first appellate authority in deciding or in coming to the conclusion in so far as the stock variation is concerned.
10. We see no reason to interfere with the findings of the Tribunal and accordingly, the questions of law are answered against the Revenue and in favour of the assessee. The revision fails and the same is accordingly dismissed. No costs.
ATR To
1. Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Madurai.
2. The Appellate Assistant Commissioner (CT) Trichy.
3. The Commercial Tax Officer Mailamchandai-I Circle Tiruchirappalli