Audit assessment on suppressed turnover upheld where admissions and delivery notes supported best judgment additions without further verification right.

Audit assessment under the Kerala Value Added Tax Act permitted additions for suppressed turnover where the assessment rested on specific delivery notes, the assessee's own admission that the books were not true and correct, and compounding of the offence with payment of tax and compounding fee. The High Court noted that such additions were supported by documentary material and admissions, not mere suspicion. It also clarified that the hearing requirement in section 24(1)(c) does not create a further right to verify alleged variations in the presence of the Assessing Authority; once notice and hearing are afforded, the assessee must place supporting material, and the best judgment power cannot be curtailed by such a procedural demand.

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Issues: (i) Whether the additions made on account of suppressed turnover were sustainable on the basis of the assessee's admissions and the documentary material; (ii) whether the assessee was entitled to a further opportunity to verify the alleged variations in the presence of the Assessing Authority under the audit assessment provisions.

Issue (i): Whether the additions made on account of suppressed turnover were sustainable on the basis of the assessee's admissions and the documentary material.

Analysis: The assessment was founded on specific delivery notes and the assessee's own admission that the books of account were not true and correct. The assessee had compounded the offence and paid the tax and compounding fee. The additions were thus not based on mere surmise, but on documentary evidence and admissions accepted by the assessee.

Conclusion: The additions for suppressed turnover were upheld in favour of the Revenue.

Issue (ii): Whether the assessee was entitled to a further opportunity to verify the alleged variations in the presence of the Assessing Authority under the audit assessment provisions.

Analysis: Section 24(1)(c) of the Kerala Value Added Tax Act requires an opportunity of being heard, but it does not require the Assessing Authority to conduct verification in the presence of the assessee. The burden to place supporting material lies on the assessee, and the best judgment power of the Assessing Authority cannot be curtailed by imposing such an procedural requirement. On the facts, the alleged suppression had already been admitted and compounded.

Conclusion: No such additional opportunity was required, and this contention was rejected.

Final Conclusion: The revisions failed, and the assessment orders as affirmed by the Tribunal were sustained.

Ratio Decidendi: In audit assessment, once notice and hearing are afforded, the assessee cannot insist on a further statutory right to verify quantification in the presence of the Assessing Authority, and admitted suppression supported by documentary evidence may be assessed on a best judgment basis.

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