1993 (2) TMI 302 - HC - VAT and Sales Tax

Tribunal upholds findings on oil-cake purchases, penalties justified, revenue favored, costs not awarded

Gandhi Oil Mill & Another Versus State of Gujarat

The Tribunal's findings regarding the non-purchase of oil-cakes, production from unaccounted purchases, and transportation route were upheld as reasonable ... - Issues Involved:1. Whether the findings of the Tribunal regarding the non-purchase of oil-cakes from M/s. Ratilal Bhogilal are perverse and contrary to evidence.2. Whether the Tribunal's findings on the oil-cakes being a by-product of unaccounted manufacture of oil are perverse and based on no evidence.3. Whether the Tribunal's implied finding on the non-payment of price to M/s. Ratilal Bhogilal is perverse and contrary to evidence.4. Whether the Tribunal was justified in placing the burden of proof on the applicant regarding the vendor's purchases.5. Whether the Tribunal's findings on the route for transportation of oil-cakes are perverse and based on no evidence.6. Whether the Tribunal's findings on electricity consumption are perverse and contrary to evidence.7. Whether the Tribunal was justified in recording findings against the applicant despite contrary findings in similar cases for other assessees.8. Whether the Tribunal was justified in relying on the ratio of electricity consumption with oil production.9. Whether the Tribunal applied correct principles of law in sustaining the levy of penalties.Issue-wise Detailed Analysis:Re: Questions Nos. 1, 3, 4, and 5:The Tribunal's findings that the applicant did not purchase oil-cakes from M/s. Ratilal Bhogilal and that delivery was not proved are based on a reasonable appreciation of the evidence. The Tribunal noted discrepancies and inconsistencies in the accounts and statements, lack of proof of delivery, and the non-existence of the alleged vendor M/s. Harishchandra Nagavat & Co. The Tribunal also found no evidence supporting the delivery or payment for the oil-cakes. Therefore, the findings are not perverse or contrary to evidence. Questions Nos. 1, 3, 4, and 5 are answered in the negative.Re: Questions Nos. 2, 6, and 8:The Tribunal's inference that the applicant produced oil-cakes in its mill from unaccounted purchases of groundnuts is reasonable. The assessment is based on the weight of oil-cakes, electricity consumption, and the absence of genuine transactions. The Tribunal found significant discrepancies in electricity consumption during the months of alleged purchases. The Tribunal's reliance on electricity consumption ratios is justified. Hence, question No. 2 is answered in the negative, question No. 6 in the negative, and question No. 8 in the affirmative.Re: Question No. 7:The Tribunal is entitled to independently appreciate the evidence in each case. The principle of res judicata does not apply to findings based on questions of fact. The Tribunal was justified in recording findings against the applicant despite contrary findings in similar cases for other assessees. Question No. 7 is answered in the affirmative.Re: Question No. 9:The Tribunal has not recorded any finding on whether the penalties under sections 45(2)(c) and 45(6) were correctly applied. Therefore, the Tribunal should decide this question on merits in accordance with law.Sales Tax Reference No. 14 of 1989:Re: Questions Nos. 1, 3, and 4:The Tribunal's findings that the applicant did not purchase oil-cakes from M/s. Ratilal Bhogilal and that the delivery route was not motorable are supported by evidence. The Tribunal noted the non-existence of the alleged vendor, lack of proof of delivery, and inconsistencies in payment evidence. Questions Nos. 1, 3, and 4 are answered in the negative.Re: Questions Nos. 2 and 6:The Tribunal's inference that the oil-cakes were a by-product of unaccounted manufacture of oil is reasonable. The Tribunal's reliance on the ratio of electricity consumption with oil production is justified. Question No. 2 is answered in the negative, and question No. 6 is answered in the affirmative.Re: Question No. 5:The Tribunal was justified in recording findings against the applicant despite contrary findings in similar cases for other assessees. The principle of res judicata does not apply to findings based on questions of fact. Question No. 5 is answered in the affirmative.Re: Question No. 7:The Tribunal correctly applied the principles of law in sustaining the levy of penalties under sections 45(2)(c) and 45(6). The penalties were justified due to the concealment of transactions and bogus billing. Question No. 7 is answered in the affirmative.Conclusion:Both references are disposed of with the answers favoring the Revenue and against the assessee. The Tribunal must decide question No. 9 on merits in accordance with law. No order as to costs.