2001 (3) TMI 990

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.... is 1993-94. The assessee is a dealer in arrack during 1993-94. The assessee had conducted business only in the said year. The assessee had bid in auction the right to conduct business in arrack in shop Nos. 118 to 132 of Group No. 1 of the Kunnamangalam Range for an amount of Rs. 22,00,500. The privilege price which was so fixed in respect of the shops in question for the year 1993-94 turned out in sharp enhancement of the rental obtained for the previous year, viz., Rs. 6,61,500. According to the assessee, the assessee was not given registration under the Kerala General Sales Tax Act and the Central Sales Tax Act. The application in form No. 21 was also submitted seeking to come within the compounding system under which dealers were permi....

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....llant noticed at the time of inspection conducted on March 22, 1994. Based on these materials the assessing authority boosted up the turnover of the appellant from Rs. 3,58,632 to Rs. 1,10,02,500. Considering the quantum of suppression detected as a result of the abovesaid inspections, the estimation of sales turnover as 5 times of the rental amount made by the reasonable nexus to the materials on record".   It is against the above order that both the State and the assessee preferred appeals before the Tribunal. The Tribunal dismissed both the appeals. So far as the appeal filed by the assessee is concerned, the Tribunal held that the estimate of turnover retained by the Appellate Assistant Commissioner is neither excessive nor arbi....

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....r retail sales in arrack, may at his option instead of paying tax in accordance with clause (v) of that sub-section, pay tax at thirty per cent of the rental amount payable by him under the Abkari Act 1 of 1077 for the licence, less tax paid by him for the purchase of arrack on the first sale point." According to us, if the department wishes to fix the turnover on the basis of the rental, it can be done only on the basis of section 7(14) of the Act. It cannot just fix the turnover on the basis of multiplying the rental. According to us, the rental cannot give a clear indication of the turnover in the light of the fact that the rental is not fixed on the basis that particular quantity of arrack will be supplied, as required by the assesse....