1997 (4) TMI 470

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....rnakulam branch are received by transfer from the head office at Bangalore. It is an assessee on the files of the Assistant Commissioner (Assessment), Sales Tax Office, Special Circle-I, Ernakulam. For the assessment year 1989-90 the petitioner filed a return declaring a total and taxable turnover of Rs. 2,40,36,961.02 and Rs. 2,37,64,324.60 respectively. The assessing authority rejected the return and accounts and completed the assessment on best judgment basis estimating the taxable turnover at Rs. 2,37,64,324.60. The accounts were rejected on the ground that the officials of the Inter-State Investigation Cell intercepted lorry No. KRC 2073 at Kanakary in Kottayam District and found that medicines worth Rs. 3,05,576.14 consigned from Bang....

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.... petitioner and that the only irregularity alleged is the detention of the goods carried in lorry No. KRC 2073 at Kanakary in Kottayam by the Inter-State Investigation Cell and the imposition of penalty under section 29A of the Act. Learned counsel submitted that the goods were despatched from Bangalore to Ernakulam through M/s. Raj Kamal Transport, which is a public transport organisation. The counsel also submitted that it appears that the vehicle contained some contraband goods, which was being carried, which the transporters wanted to unload at the earliest for their own safety, and it was in those circumstances that the driver without even the knowledge of the petitioner-company paid the security and got the vehicle and the goods relea....

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....e Act since the said transaction would not have found a place in the accounts of the petitioner.   Learned Special Government Pleader further submitted that the Sales Tax Officer (Enquiry), conducted further investigation as contemplated under section 29A of the Act with notice and opportunity to the petitioner and imposed a penalty of Rs. 45,837, which was paid by the petitioner without demur. He therefore submitted that the addition sustained by the Tribunal was perfectly justifiable. 6.. We have considered the matter. The only ground on which the assessing authority has rejected the accounts and estimated the turnover on best judgment assessment is the imposition of penalty under section 29A of the Act in respect of a consignm....

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....nt and estimated the sale value by adding gross profit. The assessing authority has not pointed out any other instance the addition of 5 times appears to be excessive and disproportionate. In the absence of any other defects and the assessing authority has no dispute, that the purchase consignment was not accounted, the estimate of the entire turnover on the basis of the purchase value is unreasonable and unfair. Considering the circumstances of the case, I find that an addition of two times the purchase value of the goods transported will meet the ends of justice." On this aspect of the matter the Appellate Tribunal after noticing the above, observed as follows: "In the circumstances we are of the view that the two times addition mad....