TaxTMI 
TaxTMI 
2012 (2) TMI 457
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....concern of the assessee?" The respondent-assessee Tvl. Safari Industries (India) Limited are dealers in suitcases and briefcases and they have reported a total and taxable turnover of Rs. 1,61,49,148 for the year 1993-94 and Rs. 1,94,78,389 for the year 1994-95. Their accounts were called and checked. The place of business at Chennai was inspected by the Enforcement Wing officers on February 28, 1996 and the officers had ascertained that the assessee are the manufacturers of suitcases, briefcases, etc., having factory at Gujarat and have 17 branches all over India. It was also found that the goods are received from the factory on stock transfer basis for sales and from other branches to Madras and no manufacturing and purchases are done at Madras and there was no import or export. The entire sales are to Tvl. Safari Sales Limited, which is their sister concern and also marketer/ distributors. Therefore, the sales effected by the sister concern, viz., Tvl. Safari Sales Limited were compared with the first sales by the assessee and they found that there was a large variation. The price for first sale by manufacturer and the second sale by the marketer, i.e., sales by their sister co....
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....e against such assessment. (2) The provisions of sub-sections (2) to (5) of section 16, shall as far as may be, apply to assessment or reassessment under sub-section (1) as they apply to the reassessment of escaped turnover under subsection (1) of section 16. R. 18C. In making an assessment under section 12A, the assessing authority shall take into account such of the following factors as may be relevant to the determination of the prevailing market price of the goods, namely,- (i) the prices charged by other dealers at the relevant stage of sale of similar goods during the relevant period; (ii) the difference between the price charged by the dealer on his sale and the price charged by the second and subsequent dealers on the sale of the same goods; (iii) the difference between the price paid by a dealer towards the purchase of the goods from the earlier seller and the price charged for the resale of the same goods; and (iv) the differential price charged on sales against bulk orders and small orders in respect of the same goods. If the difference in prices, exclusive of the sales tax element, is more than fifteen per cent, the assessing authority shall examine the reasons fo....
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....y makes the provisions contained in sub-sections (2) to (5) of section 16 applicable to assessment or reassessment proceedings under section 12A(1), as they apply to reassessment of escaped turnover under section 16(1) of the Act. The only distinction between section 16 and section 12A of the Act is that whereas section 16 of the Act relates to escaped turnovers which has/have not been accounted for and section 12A of the Act deals with the turnovers, which have been accounted for but enables the assessing authorities to determine whether the price mentioned therein is bona fide and can be accepted as representing true and real concessional price as reflected in the accounts when compared with the price that prevailed in the market at that time. Therefore, it is not possible to hold that the provisions contained in section 12Aof the Act impinge upon the legislative power of the Parliament as contained in entry 92A of List I of the Seventh Schedule, thereby travelling beyond the scope of the power conferred upon the State Legislature under entry 54 of List II of the Seventh Schedule. Therefore, it is not possible to hold that the power to determine, as conferred by section 12A of th....
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.... and (iii) the charges for after sales services, packaging, transport and other expenses incurred by the subsequent sellers which add to the cost of the goods at each stage of sale by successive dealers. The assessing officer is also bound to further examine, whether there is such difference in the price charged on the sales of the same goods to different customers and whether the goods are made available to all distributors or other customers in unlimited quantities and at the same prices. Only after satisfying himself of the above details, the assessing officer could apply provisions of section 12A and rule 18C, particularly rule 18C(i). In the assessment orders, though the assessing officer had made a comparison of the first sale price and the second sale price and the difference thereon, he has categorically stated that he could not compare the product with the selling rate of the similar commodity since the quality, size and pattern differ with each other. There is absolutely no compliance with section 12A particularly rule 18C(iv). The assessment orders merely proceed that there is a variation exceeding 15 per cent between the first and second sales. In our opinion, the mere....