Madhav Motors vs. The State Tax Officer

The learned counsel appearing for the petitioner would submit that the failure to show the correct closing stock in Form-53 was a mistake, which could not have been penalized on account of the fact that the audited trading account and balance sheet for the year 2014-2015 clearly showed the value of closing stock to be of Rs.3,99,94,853/- as on 31.03.2015. It is submitted that when penalty -3- proceedings were initiated against the petitioner for the mistake of not showing the correct closing stock in Form-53, the petitioner had approached this Court by filing W.P(C)No.30503/2019 which was disposed of by Ext.P1 judgment where this Court directed the Intelligence Officer to verify the book of accounts and to determine whether any penalty has to be imposed on the petitioner. It is pointed out that there cannot be any allegation of unaccounted sales as the closing stock as on 31.03.2015 is the opening stock as on 01.04.2015 for the assessment year 2015-2016. It is submitted that the assessment of the petitioner for the year 2015-2016 has been completed by proceedings dated 30.06.2020 by the very same officer who issued Ext.P4. It is submitted that the issue relating to the nondisclosure of closing stock in Form-53 has been considered as defect No.V in the assessment order for 2015-2016 where considering Ext.P1 judgment of this Court the officer had accepted that there is no unaccounted sale of account on the fact that the closing stock for 2014-2015 was correctly shown in the audited statement of accounts which were also uploaded in -4- Form-13/13A. It is submitted that on account of the said finding there cannot be any allegation on unaccounted of sales for the assessment year 2014-2015. 3. The learned Senior Government Pleader appearing for the respondents would refer to the counter affidavit filed in the writ petition. It is pointed out that on verification of Form-53 through KVATIS is for the year 2014-2015, it was seen that the closing stock for the year 2014-2015 was Zero and the only possible conclusion that could be drawn was that there was unaccounted sales, as in fact there was a huge closing stock having the value of Rs.3,99,94,853/-. It is pointed out that considering the above, there is absolutely nothing illegal in Ext.P4. It is further pointed out that if the petitioner has any grievance against Ext.P4, he has the alternate remedy of appeal and there is no reason why he should be permitted to approach this Court under Article 226 of the Constitution of India. The learned Senior Government Pleader also points out that despite the interim order of this Court to deposit the amount covered by Ext.P4, the petitioner has not complied with the said direction and he is -5- continuing to enjoy the benefit of the interim order without due compliance.

I have considered the contentions raised, it is true that while upholding Form-53 for the year 2014-2015, the petitioner incorrectly reported the closing stock as Zero. However it cannot be disputed that the audited statement of accounts and balance sheet which were also uploaded in statutory forms, clearly showed the closing stock as on 31.03.2015 to be Rs.3,99,94,853/-. That apart I notice that following Ext.P1 judgment of this Court, the very same officer who passed Ext.P4 had completed the assessment of the petitioner for the subsequent year namely 2015-2016 where this issue has been dealt with as under. “Regarding the unaccounted sales assessee has produced the invoice copies and convinced that there is no unaccounted sales to be assessed. Regarding Defect No. V, non disclosure of closing stock Rs.5,13,88,531/- (Rupees Five Crore Thirteen Lakh Eighty Eight Thousand Five Hundred and Thirty One Only) it is observed that State Tax Officer (IB) previously assessed the stock variations for the year 2015-16 and aggrieved by the order assessee had filed an appeal before the Hon'ble High Court of Kerala and the Hon'ble -6- High Court quashed the order of the State Tax Officer (IB) for fresh disposal. In WP(C) No. 30503 of 2019 (K) Hon'ble High Court of Kerala observed that. “ In my view, the 1st respondent ought to peruse the books of accounts maintained by the petitioner for the relevant year to see whether, the accounts reflected the correct picture with regard to the purchase and sales effected by the petitioner. Thereafter, he shall consider whether, the failure to upload the details in KVATIS, warranted the imposition of the maximum penalty prescribed under the Act. The said exercise not having been done while passing Ext. P5 order, I find that the said order cannot be legally sustained. I therefore , quash Ext.P5 order and direct the 1st respondent to pass fresh orders in lieu thereof, after hearing the petitioner. To enable the 1st respondent to do, I direct the petitioner to appear before the 1st respondent at his office at 11.00 AM. On 18/12/2019, together with the Books of Accounts relating to the assessment year in question. The 1st respondent shall pass fresh orders as directed within a month thereafter.”