Decided on March 04,1998



A.Narsimha Rao, Member (D) - (1.) THIS is an appeal filed by M/s. Laxmi Khandasari Sugar Mills, Maharajgunj, Hyderabad, against the orders of the Deputy Commissioner (CT), Charminar Division, Hyderabad dated 18.2.1997 in R.R. No. 54/95 -96 revising the orders of Commercial Tax Officer, Maharajgunj Circle in GI No. 20525/93 dated 15.2.1993. The disputed turnover is Rs. 1,39,090 -00. The appellant is manufacturer of Khandasari Sugar. It purchased Sugar Cane and got it crushed. Along with the sugar the appellant got Molasses. According to the revising authority the appellant got 84174.41 Kgs. of sugar cane crushed and got 2457.893 Kgs of molasses. The yield was 2.92 per cent. The assessment was made on the basis of the yield and the turnovers recorded in the books of account. The revising authority observed that the yield of molasses should have been 4 P.C. to 4.5 P.C. As per the para. 7 of Chapter VII of Hand Book of Excise Administration the normal quantity of molasses would be between 4 per cent and 4.5 percent of the sugar cane crushed. The quantity of the molasses which should be produced at the rate of 4 per cent of sugar cane crushed would be 3366.976 Kgs. at the minimum yielding rate. The difference between yield at 4 per cent of sugar crushed and the book yield was 909 -083 Kgs. valued at Rs. 1,39,090 -00 at Rs. 153/ - per Kg. which was taken as the yield suppressed. The revising authority revised the assessment adding this amount to the book turnover.
(2.) THE point for consideration is whether the appellant was entitled to be assessed as per the books of accounts. At the time of hearing, the authorised representative has cited the orders of this Tribunal dated 6.3.1997 in T.A. 23146/96 in support of his contentions. In that order this Tribunal has referred to the following cases and came to conclusion as follows: - In the case of Ratna Cafe, Madras -5 vs. The State of Madras : (1974) 33 STC 39, where no fault in accordance of the assessee was found it has been held that there is no justification in rejecting the book turnover on the only ground that the accounts of the assessee showed a gross profit of 39 per cent as against general gross profit of 50 per cent in hotel business; and therefore the addition made in the assessment could not be sustained. In the case of B. Ravi vs. State of Tamil Nadu & Another : (1981) 48 STC 274, where the assessing authority added 20 per cent to the purchase value disclosed in the account books on the ground that low percentage of gross profit at 3 per cent disclosed by the assessee in the account books suggested sales omission, it has been held that there was no material to justifiably pay that the addition of 20 per cent to the purchase turnover was reasonable. In the case of Constructional Engineers & Others, Hyderabad vs. Commissioner of Commercial Taxes, A.P. Hyderabad, (1992) 15 APST 267, where the assessing authority added a gross profit of 25 per cent to arrive at the sale value of certain imported goods and in revision the Dy. Commissioner granted relief by reducing the rate of profit from 25 per cent to 10 per cent, the Commissioner revised the order of the Deputy Commissioner on the ground that there was no material before the Deputy Commissioner and the Deputy Commissioner did not look into the final accounts before reducing the margin of profit, it was held that there was no adequate justification for the Deputy Commissioner to interfere in revision in the absence of any material and that for interference in the orders of the C.T.O., the Deputy Commissioner find illegality or impropriety in the order proposed to be revised and in the absence of any such illegality or impropriety, and exercise on revision power the Deputy Commissioner was not competent to substitute the judgment of the C.T.O., the assessing authority. Excise is levied on production and sales tax is levied on the sale or purchase of goods. The judgment of the High Court cited by the Deputy Commissioner related to levy of duty on production and in that case the quantum of production was estimated. Since sales tax is levied on sale or purchase of goods, there could not be any estimate of sales on the ground that certain quantum has escaped assessment unless there is a proof before the authorities to the effect that the appellant had suppressed the sales. Even by accepting the yield as per the Hand Book of Excise Administration the estimate could be useful for the purposes of estimate of production and the differential quantum could have been treated as closing stock but could never be treated as if it was sold away without bringing to the books of account. The authorised representative also filed a copy of the yield of sugar and molasses during the year 1992 -93 to show that, there was more yield of molasses and less yield of sugar in the year than the yield during the assessment year in question. Considering these aspects it is found that there is no justification for the revising authority to make an estimate of turnover relating to sale of molasses and to revise the assessment.
(3.) IN the present case also there is no proof before the revising authority to the effect that the appellant had suppressed sales. The authority has also not verified whether the total yield of sugar and molasses; whether the less yield of molasses shown in the books of account was due to more yield of sugar. In the absence of any material there is no justification for the revising authority to make estimate and revise the assessment. In the result, the appeal is allowed and the impugned revisional orders are set aside and the assessment orders are restored. Dictated to the Stenographer, transcribed by him and pronounced in the Open Court on this the 4th day of March, 1998.;

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