Stock variation demand cannot be restored without independent scrutiny of appellate findings; Tribunal order set aside.

The Madras HC held that a revisional or appellate authority cannot restore a tax demand on stock variation by merely repeating the assessing officer's view. Where the Appellate Assistant Commissioner had accepted the stock reconciliation and the discrepancy was said to fall within the Government Order's tolerance, the Tribunal was required to independently examine the evidence and identify any error in the appellate findings. Because it did not displace those factual conclusions or give specific reasons showing them to be wrong, its order was unsustainable. The Tribunal's order was set aside and the assessee obtained relief.

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Issues: Whether the Tribunal was justified in restoring the tax demand on the basis of stock variation when the Appellate Assistant Commissioner had accepted the stock reconciliation and the discrepancy was stated to be within the tolerance contemplated by the Government Order.

Analysis: The petitioner's business premises had been inspected and a stock variation was noticed, leading to reassessment under the Tamil Nadu General Sales Tax Act. The Appellate Assistant Commissioner examined the records and the stock reconciliation statement prepared by the Enforcement Wing officials and accepted the assessee's case. The Tribunal, however, merely referred to the assessing officer's findings and the Government Order without examining whether the Appellate Assistant Commissioner had erred on the evidence. The order of the Tribunal did not contain any specific finding displacing the appellate authority's factual conclusions or showing that those conclusions were incorrect.

Conclusion: The Tribunal's order was unsustainable and was set aside.

Final Conclusion: The writ petition succeeded and the assessee obtained relief against the Tribunal's order.

Ratio Decidendi: A revisional or appellate order is liable to be interfered with when it rests on a mere repetition of the assessing officer's view without independent examination of the appellate authority's factual findings or the material evidence on record.

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