The State of Andhra Pradesh v. M/s. Sri Rama Timber depo 23110

THE HON'BLE SRIJUSTICE T. VINOD I.iI]MAR AND THE HON'BLE SRI JUSTICE PULLA KA RTHIK 'tAX REVISION CASE No.l82 of 20ttl ORDER: (Per Hon'bla Sri Justice T.Vinod Kumar) This Tax Revision Case under Section 22(l) tt the Andhra Pradesh General Sales Tax Act, 1957 (for short'thr: ,/.ct') is filed by the Revenue-State as petitioner against the ordr . tf the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderaf'a,[ (for short 'the Tribunal) in Tax Appeal vide T.A.No.:(:7197 dated 0l -t I -2001

2. The Assessment Year involved is l99l-92 und .r'the Act.

3. The respondenVassessee is a registered deal :r under the provisions o1'the Act on the rolls of the Commercial Iax Otficer, Malakpet Circle, Hyderabad carrying on business n trading of timber, cut-seizes, flush doors, hre-ood and also n anufacturing and sale of teakwood and non-teakwood doors and v irLdows etc. 2

4. During the Assessment Year 1991-92, the respondent / assessee had claimed benefit of set-off of tax paid on timber ffom the tax payable on cut pieces etc., in terms of G.O.Ms.No.572 Revenue (s) Department, dated 09-06-1987; and that the Assessing Authority had allowed the said claim by his order of Assessment dated 1 9-0 1 - 1993 on a tumover of Rs.8,34, 133/- representing the local purchases ol Teak Wood, round logs eflected made from registered dealers.

5. The Deputy Commissioner (CT), Charminar Division, Hyderabad, however, finding that the order of assessment granting set-off of tax in terms of G.O.Ms.No.572 dated 09-06-1987 is not in accordance with the provisions of the Act and the spirit of the G.O. and taking note of the fact that the responden/assessee did not maintain separate registers showing the tax paid on timber purchased locally from registered dealer and the purchase of timber from outside the State and utilized in conversion into cut-sizes, revised the order of assessment in exercise of power conferred under Section 20(2) of the Act and $r4!ffiry 3 had disallowed the claim of set-off by his order dated 02-0r-1997

6. Aggrieved by the aforesaid order of r_ re Depufy Commissioncr (CT) revising the order of assessr.ri:nt rejecting granting of set-off in terms of G.O.Ms.No.572 date, i ()9-06-1987, the respondcntr'assessee preferred an appeal under l,: Act to the Sales Tax Appellate Tribunal numbered tl.-. same as T.A.No.367i97

7. The I'r'ibunal by considering the case of rtspondent / assessee and the submissions made on behalf of the I{evenue had held that tirc revisional authority merely on Ircsurnptlons without any rnaterial dehors the assessment rec, ,r.I and also noting that no inspection was conducted, allowed Ir: appeal of the respondent r' assessee.

8. Aggriered by the said order of the Tribuna he present Revision is filed 4

9. Heard Special Standing Counsel appearing on behalf of petitioner and Sri N.Kodanda Rama Rao, learned counsel for the respondent, and perused the record.

10. On behalfofthe petitioner/State, it is contended that since, the respondent/assessee purchased timber from within the State and outside the State and used the same after cutting into sizes in manufacture of doors and windows, the respondent/assessee is entitled only to claim set-off in respect of tax suffered on timber I purchased locally in terms of G.O.Ms.No.572 and inasmuch as the respondent/assessee did not provide the details as to the quantity of timber purchased locally and utilized for cutting into sizes and disposed of during the year, the Assessing Authority had erred in granting set-off of tax on the entire value of purchases made by the respondent from the dealers outside the State. 1 1. On behalf of the petitioner/State it is further contended that since, the respondent/assessee had failed to estabiish before the Assessing Authority as to which timber was utilized for doors and windois, as it did not maintain separate accounts, the 5 Assessing Authority had erred in not following Sr:r:tion 7-A of the Act; and that the revisional authority had righr -\/ revised the order of assessment and brought to tax the turno', er relating to local purchases of timber.

12. Leamed Special Standing Counsel appearing r:n behalf of the petitioner-State further submits that since, tl: : revisional authority on cxaminir-rg the record of assessment h,, r,' ng corne .to the conclusion that the respondent/assessee had d,:;lt in goods purchased by it both locally as well as outside l r,: State, and since no details as to which of the material is use,i for making doors and u'indows and which material is used f6rr' :utting into sizes such as beams, planks and rafters referre, I to in item No.l45 of the first Schedule to Act to claim s,:t.off of tax payable on cut sizes, had rightly revised the order r ['assessment dated 19-01-1993; and that the Tribunal had faile I :o consider the aforesaid facts while dealing with the appeal i led by the respondent/assessee I 3. On behalf of the respondent/assessee, it is con te rded that it is entitled to claim the benefit of set-off on tax 1-.aid on the 6 quantlty and value of purchases made by the respondent / assessee from the registered dealers within the State for being utilized in conversion as cut-sizes in terms of G.O.Ms.No.572 dated 09-06- 1987.

14. On behalf of the respondent/assessee, it is also contended that the value of the timber purchased by the respondent/assessee locally is more than the value of timber purchased from outside the State; that the Assessing Authority at the time of assessment by examining all the aforesaid aspects, had granted the benefit of set-off on tax in terms of G.O.Ms.No .572 dated 09-06- I 987; and that the revisional authority without any material and on mere surmises had held that the respondent/assessee is not eligible for set-off on entire local purchases and erroneously restricted the claim of set-off, on tumover of Rs.4,09,098/- only as against the value oflocal purchases being a sum of Rs.8,34,134l-.

15. On behalf of the respondenL/assessee, it is also contended that since, the assessing authority did not dispute the correctness of the books maintained by it nor having found any deficiency in the stock of timber purchased locally and also from outside the ii -- ai-ir - ,/ /4 l State, the revisional authority could not have t::t tricted the tumover in ordcr to claim set-off on tax paid thereo"

16. The respondenVassessee thus, contends that tl : I-ribunal by considering the aforesaid aspects, had rightly allov':<L thc appeal by recording its findings which are findings of itct, and no question of law arises for the State to file the presen llevision'

17. We havc taken note of respective contentions r.1icd

18. The Tribunal by considering the case as pl':zded by the respondent/assessee as well as the petitioner/State Lad noted that the respondent/assessee is purchasing the logs frc'rrr outside the SlateaswellaswithintheStateandisconvertinllt.teentirelot purchased fnrm outside the State into doors and u rrlon's' while the timber purchased within the State being con'':tted into cut sizes only. I he Tribunal further noted that there i ' no basis for such presumption lor the revisionat authority tr arrive at conclusion otherwise for him to deny/reject ttr' exemption granted by the Assessing Authority. 8

19. The Tribunal further held that the quantity of material purchased and utilized are capable of verification and should have been so verified and that the assessing authority did not record any finding to the effect that the respondent/assessee had claimed exemption wrongly on taxable sales and that the assessing authority has not pointed out any suppression. The Tribunal also noted that there is no finding recorded by the assessing authority in the order of assessment to the effect that the retum filed was either incomplete or incorrect; and that the accounts ofthe respondent/assessee were also not rejected.

20. The Tribunal by noting as above, held that since, the Assessing Authority did not find any discrepancy with regard to the accounts or retums filed by the Assessee nor had pointed out any suppression; and that the assessment order not being a best judgment assessment, the revisional authority could not have revised the said assessment order merelv on presumptlons without any material dehors the assessment record

21. The Tribunal while arriving at the aforesaid conclusion has placed reliance on the judgment of the Madras High Court in T I i I I I i I i I I I I i I i I 9 M/s.K.Ramalinga Mudaliar & Company Vs. State utrd onotherl wherein it rvas held that mere fact of petitior','r failing to rnaintain a stock register by itself was not sufficit' rt ground for rejecting the retum.

22. Though. the revisional authority while exerci:; 'rg revisional powers conferred on him had noted that in the cali rr ation given by the respondent/assessee, it having taken the out ri le the State purchases together with locat purchases for th' purpose of arriving proportionate timber utilized for making ut-sizes and manufacture ol windows and doors as not being :r: rrect, noted that there was no inspection that was cond!r(- ed on the respondenVassessee's premises to clain ol respondenVassessee using the timber purchased l': cally along with timber purchased from outside the State in th ' rnanufacture of doors and windows and as such, not being eli,:il.tle to claim set-off of tax on timber purchased locally and ul li zed lbr cut- slzes. ' tggo stc 475 10

23. The Tribunal by noting as above had held that dehors any material outside the assessment record, the presumption arrived at by the revisional authority cannot be held to be valid. The said finding recorded by the Tribunal is a finding of fact and does not give rise to question of law.

24. Further, since the petitioner/Revenue not being able to show that the said finding recorded by the Tribunal as being contrary to law or the Tribunal having omitted to consider the relevant material available on assessment record while arriving at the aforesaid conclusion giving rise to a question of law, this Court is of the view that the order of the Tribunal in setting aside the order of the revisional authority suffering from any error or giving rise to any substantial question of law for it to be considered by this Court in exercise of revisional jurisdiction under Section 22 of the Act.

25. Thus, this Court is ofthe view that the present Tax Revision Case as filed is devoid of merit and it is accordingly dismissed. No order as to costs. \ \ 11 As a sequel, miscellaneous petitions pending I any shall stand closed i;D/. R.KARTHIKEYAN JOINT REGISTRAR L 't l i.l\ SE CTION OFFICER //TRUE COPY// To, I t records)

1. The Sales Tax Appellate Tribunal, Andhra pradesh, Hv:lr:rabad. (with 2 The D^eputy Commissioner (CT) Charminar, Division, l-;c,erabad. 3. The Commercial Tax Officer, Malakpet Circle, Hyderatr:d 4. One CC to SPL Government Pleader for Taxes [O:,1.,C] ' 5. One CC to Sri N. Kodandarama Rao Advocate JOe.'r:1 6. Two CD Copies DL/PSL I I I I I HIGH COURT DATED:0410712O25 ORDER TRC.No.182 ol 2002 'r 0 ll-ius \., DISMISSING TAX REVISION CASE ./ )^ \6 I8