TaxTMI 
TaxTMI 
2023 (3) TMI 493
X X X X Extracts X X X X
X X X X Extracts X X X X
....ents of wooden frames of doors, windows and for planing jobs etc. The issue involved in these revision petitions pertains to the legality of the assessment orders and penalty orders passed under the Kerala Value Added Tax Act [KVAT Act] for the assessment years 2008- 09, 2009-10 and 2010-11. 3. Pursuant to an inspection conducted at the saw mill of the petitioner on 4.9.2010, a shop inspection report was drawn up, and relying on the material that was seized from the petitioner's premises on the said day, the Intelligence Officer, Kozhikode passed an order dated 25.1.2011 imposing penalties of Rs.26,52,202/- for the assessment year 2009-10 and Rs.36,02,373/- for the assessment year 2010-11. Aggrieved by the said orders, the petitioner approached the First Appellate Authority, who, vide an order dated 16.9.2011, set aside the penalty orders passed by the Intelligence Officer and directed him to go into the matter afresh after furnishing the petitioner with the details of the seized documents etc. In the de novo proceedings that followed, the Intelligence Officer passed a fresh order dated 28.6.2012 imposing penalties of Rs.2,21,102/- for the assessment year 2008-09, Rs.68,40,658....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ound that the Intelligence Officer had acted merely on presumptions and surmises, and hence, the penalty imposed for the said year could not be sustained. For the assessment year 2009-10 and 2010-11, the Appellate Authority found that, as in the case of the assessment year 2008-09, the additions to the turnover of the petitioner were made on the basis of recovered slips that contained data relating to the businesses of Sri.K.I. Sreenivasan and Sri.K.V. Abdul Rasheed. It was noticed that Sri.Balachandran, who was cited as the witness in the shop inspection report, had deposed that he was the accountant of Sri.K.V. Abdul Rasheed, and both of them had deposed that the details in the slips recovered from the petitioner's mill, at the time of inspection, pertained to the business of Sri.K.V. Abdul Rasheed. A similar statement had also been given by Sri.K.I. Sreenivasan, who, like Sri.K.V. Abdul Rasheed, had come forward and deposed that some of the entries in the seized slips pertained to his business. The Appellate Authority found that in the light of the said evidence that was tendered by Sri.Balachandran, Sri.K.V. Abdul Rasheed and Sri.K.I. Sreenivasan against their own interests....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in such slips / diary were related to the Respondent only. But the case was challenged by the Respondent on the contentions that slips / diary was recovered not from their business place, but from the person named Sri. E. K. Balachandran (who was present at the site of inspection and also signed the SIR, in witness of the same), the accountant of Sri. K.V. Abdul Rasheed, who had entrusted the timber to the Respondent for sawing and job work. But the contentions of the Respondent were overruled in adjudication, holding that deposition of the witness (Sri. E. K. Balachandran) could not be accepted because he was present at the site of inspection throughout and signed the SIR after completing the inspection, being an accountant who was conversant with the procedures of shop inspection, he would have been well aware that the same was conducted in the business place of the Respondent only and also that verification of the diary and the slips revealed that the entries made thereon were not related to the transaction effected by Sri. K.V. Abdul Rasheed, but by the Respondent only. This prime and cardinal issue involved in the impugned proceedings of penalty were not addressed properly no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iary and slips were recovered either from the business place of the Respondent herein or from the witness to the inspection and also since the entries in the diary and that in the Sawing register and invoices were found in the same handwriting of the witness to the inspection, it has been proved beyond doubt that he was the accountant of the Respondent herein at the time of inspection etc.) are only to be accepted. The whole facts and circumstances involved in the case make this bench of the Tribunal finds that the Respondent herein was engaged in the business of taxable goods (Timber / wooden furniture etc.), in the guise of the Sawing Mill / Job work unit, the witness to the inspection (Sri. E.K. Balachandran) was the accountant of the Respondent herein, the transactions recorded in the slips / diary recovered from the business place / the person of the said witness are related to the Respondent only and hence the allegations as well as the findings of the Enquiry authority are liable to be upheld and so the findings in 1st appeal, to the contrary are liable to be set aside." Based on the above finding, the assessment orders were also restored by holding as follows: "11. The ....