TaxTMI 
TaxTMI 
2022 (2) TMI 891
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....he representative revision for referring to the circumstances leading to the final common order made by the Tribunal in the Tax Appeals referred to above. The counsel consent to disposing of the revisions by this common judgment. O.T. Rev. No. 40 of 2018 3. The dealer is incorporated as a Private Limited Company under the Companies Act, 1956. The dealer on 01.12.2009 had taken registration under the Act and was engaged in trading Cosmetics, Computer Printers, Electronic and Electrical items, Watches, Garments, Textiles, Household articles etc. On 30.04.2010 the Intelligence Officer, Squad No. II, Department of Commercial Taxes carried out inspection of the premises of the dealer where the business, narrated above, was being undertaken. The Intelligence Officer has taken possession of books of accounts, ledgers, documents etc. from the dealer. Thereafter, referring to a few omissions and commissions, warranting action under Section 67 of the Act, since are noticed, penalty proceedings were initiated under Section 67 of the Act. The insinuation or circumstances which constituted penalty proceedings, stated precisely, are categorized under the following three heads: "i)....
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.... Income Rs. 12,000. In nut shell an investor of Rs. 19,170/- is assured of Rs. 2 Lakhs i.e., 1000% of the investment within shortest span of time extending from one month to maximum of 5 years. The product package details offered by the company are as follows. Sl.N o. Product Combination Price offered by the company Chain site & Board status Binary Starter Kit Packages 1 Power X+ premium Suit Length 5490 One Binary Site 2 Open Cooking oven +Premium suit length 6790 " 3 Pureit water Purifier + Premium Suit Length 6890 " 4 Dish TV STB + Premium Suit Length 6590 " CB Revenue Sharing Pool Packages 1 OC Oven [1 No.] + Pureit [1 No] + Power X [1 No] + Suit Length [3 No.'s] 19170 One Binary Site + One Board Site 2 Dish TV [1 No] + OC Oven [2 Nos.] + Suit Length [3 Nos.] 20170 " 3 OC Oven [1 No.] + Pureit [ 1 No.] + Dish TV [ 1 No.] + Suit Length [ 3 No.'s] 20270 " 4 OC Oven [3 No's] + Suit Length [3 No.'s] 20370 ": 5 Digitron Inverter [1 No.] + Suit Length [1 No.] 26490 " 6 Metlife Insurance [Only Nationalised Bank DD] 25000 ....
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....dvance receipts from June 2009 to November 2009 The Intelligence Wing managed to detect a huge turnover suppression of Rs. 5,54,99,600/- prior to the registration period of the Company through the inspection conducted on 30-04-2010. Against the proposal for this tax suppression, the Company submits the following explanations. i. The said receipts are only advances received by the Company and the consequent Sales were only effected after 01-04-2010 ii. Initially Company plans to market Insurance Products, Tourism Packages and other service oriented products and hence received advance amounts. iii. Our customers are from various parts and they have come to our place of business to take delivery of goods and hence the time gap between advance and sales. iv. It is proposed to arrive the alleged suppression by treating the entire turnover as assessable @ 12.5% whereas the Company is also dealing in items taxable@4% The explanations i to iv made by the Company have been considered at length with due attention to the returns filed, seized records, registration particulars, books of accounts produced and is decided accordingly on the me....
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....ntaworld Building. Poothole P.O., Thrissur a maximum penalty Rs. 2,60,95,134/- [Rupees Two Crore Sixty Lakh Ninety Five Thousand One Hundred and Thirty Four Only] being equal to double the amount of tax evaded for the year 2009-10. The penalty imposed shall be paid as per the demand notice in Form No. 12 attached herewith." 4. As a matter of record the penalty imposed by the intelligence officer has been confirmed by the Deputy Commissioner (Appeals) in Annexure-B order dated 22.06.2011, and by the Tribunal in Annexure-I order dated 30.12.2017. The Tribunal examined the imputation against the dealer, its reply, and detailed consideration of the conclusions recorded by the Intelligence Officer and confirmed the findings on all the three categories. The conclusions now confirmed by the Tribunal are findings of fact. By prioritizing his arguments, Adv. Harisankar V. Menon, at the outset, argued on non-disclosed turnover between 26.06.2009 to 30.11.2009 and suppression of turnover during the period 01.01.2010 to 31.03.2010. 4.1. The contentions urged challenging the levy of penalty on account of alleged suppression of sale and unaccounted sales are either extension or re....
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....in the instant case, is Section 67 of the KVAT Act. Clauses (a) to (1) of Section 67 enumerates the various offences that attract imposition of penalty. If any authority empowered under the Act is satisfied that any person has committed any or all of the offences enumerated in clauses (a) to (1): "such authority may direct that such person shall pay, by way of penalty, an amount not exceeding twice the amount of tax or other amount evaded or sought to evaded where it is practicable to quantify the evasion or an amount not exceeding ten thousand rupees in any other case." When action is initiated under Section 67 of the KVAT Act for defects/offences mentioned in clauses (a) to (I), it is to be noticed that the authority is clothed with the power to impose, by way of penalty, an amount not exceeding twice the amount of tax or other amount evaded or sought to be evaded, where it practicable to quantify the evasion or in any other case, Rs. 10,000/-. It is pertinent that in imposing penalty at twice the tax evaded or sought to be evaded, it should be practically possible to determine and quantify the amount evaded or sought to be evaded. This does not contemplate any ....
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....ness transactions, which would lead to the definite conclusion of evasion or attempt to evade. On detection of such offences; in the event of the tax evaded or sought to be evaded being determinable, the officer initiating penalty proceedings is perfectly justified in imposing penalty at the maximum rate of twice the rate of tax actually evaded or sought to be evaded. Such officer conducting penalty proceedings cannot exceed his jurisdiction by finding out as to whether the evasion detected would in fact lead to an inference of earlier or subsequent evasion. Nor can such inferences regarding the earlier or subsequent conduct be reflected in the penalty proceedings by way of estimation of turnover based on such inferences. This, going by the clear words employed in the Statute, is within the realm of the assessment proceedings." He prays for setting aside the penalty imposed on the basis of estimation. 6. Mr. Shamsudheen contends that the dealer was doing business in multilevel marketing. From the order of the Intelligence Officer, it is clear that the dealer was selling combo packages, one taxable item with a tax exempted item. The Intelligence Officer has not decided the tur....
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....alty on such commissions and omissions by the dealer. Estimation, if allowed to constitute one of the guiding factors, such estimation is resorted to impose penalty on consideration of revenue and the Treasury, and not commensurate to the omission/commission noted in a given case. 8. 'Estimate' in legal parlance is understood as meaning: A valuing or rating by the mind, without actually measuring, weighing or the like; rough or approximate calculation; an approximate judgment or opinion as a rough or an accurate calculation, or measurement. A statement, generally in writing, specifying the amount of money for which a contracting party will perform certain work or supply certain goods or building estimate. An offer is not less binding for being in the form of an estimate and headed estimate.' OR 8.1. To judge and form an opinion of the value, from imperfect data, (to fix the worth of) roughly or in a general way, to form an opinion of, as to amount, number etc from imperfect data, comparison or experience; to make an estimate of; to rate; to calculate roughly; to assess. A synonym used in general parlance is 'guess', meaning estimate without calculati....
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....over during the registration period (conceded suppressed) have been fixed at 3,76,29,610/-, We have extracted at para 12 above how the Intelligence Officer has computed the above turnover of 3,76,29,610/-. The assessee has failed to place any material before us to show that the turnover fixed by the Intelligence Officer is erroneous. As stated earlier, the assessee's only plea before this Tribunal was to remit the case back to the Intelligence Officer. But we have stated the reasons why the plea cannot be accepted. No valid material has been placed before us to justify a remand. Based on a bare statement, the plea cannot be accepted. 24. Now coming to the appeal for the month of April 2010 (2010-11 - VAT 1486/2011), it can be seen that the Intelligence Officer has arrived at the tax sought to be evaded amounting to Rs. 14,58,345/- as follows: "The tax liability of the Company for the year 2009-10 as arrayed in para 10 -C, D and F is consolidated as under:- Sl.No Particulars Taxable @ 4% Taxable @ 12.5% Total Turnover Total Output Tax Liability Turnover Tax Turnover Tax I Suppressed Taxable Turnover April ....
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....ce, I direct the assessing authority to conduct analysis once again by considering the purchases and sale bill and re-compute the tax effect on this point. It is also directed to the assessing authority to refix the quantum of penalty on the basis of the discussions and directions given in the above paragraphs." 27. From the above, it can be seen that Deputy Commissioner (Appeals) has stated cogent reasons for directing the Intelligence Officer to make a fresh analysis after considering the purchase and sales bills. We do not find any infirmity in the above stand taken by the first appellate authority. There is no merit in the appeal filed by the Revenue. 28. Apart from the irregularities found at the time of inspection of the business place which we have referred above, the Intelligence Officer has also pointed out at page 7 of the penalty order for the year 2009-10 that the assessee represented by the Managing Director Sri. A. Narayanankutty and the Director Sri. K.B. Mohammed Azaraf has deliberately filed false and untrue affidavit before the Registering Authority of the Commercial Taxes Department. The assessee also failed to furnish the stock inventory and th....