Omission in return alone cannot justify turnover addition without proof of escapement of taxable sales turnover.

An omission or inaccuracy in a return, by itself, does not justify an addition to taxable turnover unless the Revenue shows escapement of taxable sales turnover. The Kerala HC noted that the discrepancy was only in purchase turnover; there was no finding of unaccounted sales or any difference in sales turnover. In that situation, the return may be incomplete or incorrect and may attract penal consequences under the Act, but it does not support an addition to turnover. The State's revision therefore failed.

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Issues: Whether the addition to taxable turnover based only on omission of purchase turnover in the return and failure to file a revised return could be sustained when no escapement of sales turnover or unaccounted sales was shown.

Analysis: The return and audited statement showed a discrepancy in purchase turnover, but the authorities did not find any difference in the sales turnover or any unaccounted sales. The omission, at the highest, made the return incomplete or incorrect and could attract penal consequences. In the absence of any finding that the omitted purchases had resulted in escapement of taxable sales turnover, the basis for making an addition to turnover was not made out.

Conclusion: The addition to taxable turnover was not sustainable and the revision on behalf of the State failed.

Ratio Decidendi: An omission or inaccuracy in the return, without proof of escapement of taxable turnover, does not by itself justify an addition to turnover; at most, it may attract penal action under the Act.

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