Revisional power upheld where undisputed purchase suppression and excess stock justified restoration of the reassessment order.

Revisional interference under the Karnataka VAT Act was justified where undisputed suppression of purchases in arecanut, tobacco products and gutkha, together with excess stock found on inspection, showed that the appellate order had not properly addressed the basis for reassessment. The Revisional Authority could validly treat the appellate order as prejudicial to revenue and restore the assessment on the footing of detected suppression and permissible estimation of turnover. The challenge to the revision order therefore failed.

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Issues: (i) Whether the Revisional Authority was justified in exercising suo motu revisional power under section 64(1) of the Karnataka Value Added Tax Act, 2003, and in setting aside the Appellate Authority's order when suppression of purchases and stock was found.

Analysis: The material on record showed undisputed suppression of purchases of arecanut, tobacco products and gutkha, as well as excess stock noticed during inspection. The Appellate Authority set aside the reassessment without properly dealing with the suppression or the basis of estimation. In such circumstances, the Revisional Authority was justified in holding that the appellate order was prejudicial to the interests of revenue and in restoring the assessment on the basis of the detected suppression and permissible estimation of turnover.

Conclusion: The revisional interference was valid and the challenge to the revision order failed.

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