M.G. Girijan vs. State Of Kerala

The question of law framed is as follows: i) Ought not the Tribunal have found the defect noticed in the return is only technical, since the transactions are accounted by the dealer and included in the return, but however erroneously omitted to be consolidated as the sales and purchases of the year? Having gone through the orders we are of the opinion that a OT.Rev.No.86 OF 2015 3 further question of law arises as follows: ii) Ought not the Tribunal have deleted the addition of undetected purchase turnover with 10% G.P., since the same was detected from the KVATIS and the said purchases are already reflected in the total sales turnover?

The learned counsel for the revision petitioner argues that Section 25AA was inserted in the KVAT Act by an amendment in the year 2019 and the said benefit has to be given to the appellant with respect to Input Tax Credit. The learned Senior G.P. seeks to sustain the order and argues that Section 25AA is prospective in nature.

The assessee admittedly did not disclose any turnover nor was the collected tax paid. The assessee cannot claim that it is a mere technical defect. The explanation offered for filing a return without disclosing the purchase and sales turnover is also not satisfactory. We do not find any reason to interfere with the best judgment assessment made. We answer the first question of law in favour of the revenue and against the assessee.

The assessee's contention with respect to Section 25 AA cannot be countenanced . The same was brought into the OT.Rev.No.86 OF 2015 4 statute only after the tax regime changed from that of Value Added Tax to the consolidated Goods and Services Tax. The provision was intended for speedy completion of assessments under the past regime, and would not apply to completed assessments. The assessment in the present case stood completed by Annexure D order in the year 2012 itself.

On the 2nd question of law, we find that the entire purchase turnover added to the total turnover with 10% G.P. was detected from the KVATIS. Hence, the said purchase turnover was that from registered dealers for which tax has already been paid. The sales turnover, also received from the KVATIS, shows more G.P. than that adopted by the Assessing Officer at 10%.

In such circumstances, we are of the opinion that the purchase turnover with G.P. has to be deleted and we do so. However, the assessee being a dealer in hill produce, there would have been necessarily purchases from unregistered dealers. We make an addition of the purchases at half of the undeclared purchase turn over and make an addition of 10% G.P. The said amounts would be added to the total turnover. Hence while answering the second question of law in favour of the assessee , we retain one half of the purchase turnover revealed from the OT.Rev.No.86 OF 2015 5 KVATIS with 10% G.P., as the addition made to the sales turnover, as undisclosed purchases that would have been made from unregistered dealers. We make it clear that the assessee would not be entitled to any Input Tax Credit and there is no warrant to tax the purchaser from unregistered dealers. We partly allow the revision as above. No order as to costs. K.VINOD CHANDRAN JUDGE T.R.RAVI JUDGE SSK/23/11