Agency agreement not genuine where unsupported records showed taxable sales by the assessee; revision, assessment and penalty upheld.

A belatedly produced and uncorroborated agency agreement did not rebut the finding that the assessee was an independent dealer effecting taxable sales on its own account. The revisional authority was justified in treating the transaction as a sale by the assessee, sustaining assessment under the dealer-liability provisions rather than escaped turnover reassessment, and confirming penalty for taxable transactions carried out without proper registration and tax payment. The show-cause notice was also valid because it stated the grounds for revision without finally prejudging the matter, and the assessee had an opportunity to object. The revisional order was therefore upheld.

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Issues: Whether the revisional authority was justified in interfering with the appellate order and sustaining assessment and penalty on the footing that the alleged agency agreement was not genuine, the assessee was liable as a dealer, and the assessment under the relevant provisions was proper.

Analysis: The assessee had not placed the alleged agency agreement before the assessing or appellate authority and produced it only at the revision stage. On the material available, the Court accepted the revisional authority's view that the assessee was an independent partnership concern required to account for its turnover separately. The document styled as an agency arrangement did not convincingly establish that Prabhath Granite Pvt. Ltd. was merely acting on behalf of the assessee; instead, the surrounding circumstances, absence of supporting entries regarding commission or security deposit, and the nature of the arrangement supported the conclusion that the transaction was, in substance, a sale by the assessee. The Court also held that the show-cause notice was not vitiated merely because it stated the basis for proposed revision, since the assessee was given an opportunity to object and the notice did not pre-decide the matter. The revisional authority was further justified in applying assessment under the provisions governing dealers liable to registration rather than treating the matter as escaped turnover requiring reassessment, and the levy of penalty was sustained in view of the violation involving taxable transactions without proper registration and payment of tax.

Conclusion: The revisional order was upheld, the agency plea was rejected as not genuine, assessment and penalty were sustained, and the challenge failed.

Ratio Decidendi: A belatedly produced and uncorroborated agency agreement cannot displace the taxing authority's finding that the assessee itself effected the taxable sale, and a revisional notice is valid if it discloses the grounds for reopening without finally prejudging the issue.

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