Southern Metal Rolling Mills (P) Ltd. Vs. State of Kerala - Court Judgment

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- labour & services appointment: [v.k. bali, ch, p.r. raman & s. siri jagan, jj] post of pharmacist in homeopathy subordinate service - special rules for kerala homeopathy subordinate service rules, 1999 introducing new qualifications vacancy arising subsequent to coming into force of the said special rules held, vacancies have to be filled up only in accordance with special rules, 1999. unfilled vacancy that had arisen prior to amendment cannot be filled up by candidate not possessing amended qualifications prescribed by special rules. state government has the power to frame or amend the special rules with or without retrospective effect. mohanan k.r. & anr vs director of homeopathy, kerala homeopathy services, trivandrum & ors. - we have examined the decision of the first appellate authority as well as of the tribunal and this obvious defect has remained to be treated in the same fashion as if there is undervaluation. giving an anxious thought to the situation, we would not like to disturb the addition of 20 per cent granted by the first appellate authority and confirmed by the tribunal.v.v. kamat, j. 1. the petitioner-assessee is a manufacturer of aluminium vessels and is a dealer registered with the additional sales tax officer, chengannur. the assessment year in question is 1984-85. the assessment was completed by rejecting the accounts and making an addition of 30 per cent to the declared sales and further addition of 70 per cent of the added turnover as purchase turnover by the assessment order, annexure a.2. seeing the assessment order, we find that the accounts produced are held to be not accepted as correct and complete for certain reasons. as far as the present revision case is concerned, after going through the material on record, with the help of the counsel for the parties, we find two aspects that require consideration. one of them is found to be considered as undervaluation and it is as follows :'3. almost 90 per cent of the sales by the company was effected to the two sister concerns, i.e., southern metal trades and insan metal industries. the average sale value rate fixed for the vessels sold to the above sister concerns was rs. 34 per kg. up to may 16, 1984 and thereafter it was rs. 38 per kg. but the sale value realised from the outsiders was at average rate of rs. 37 per kg. up to may 16, 1989 and thereafter at 41.50 per kg. thus the sales effected to the sister concerns realised a value less by rs. 3 than that was realised in respect of the sales effected to other parties. this showed clear case of undervaluation.'it would be clear at once that as far as outsider customers are concerned, the articles were sold at rs. 37 per kg. at an average rate up to may 16, 1989 and thereafter at rs. 41.50 per kg. however, with regard to the sister concerns, up to may 16, 1984, they were sold at rs. 34 per kg. and thereafter at rs. 38. it is held that this showed clear case of undervaluation. it is obviously not, because the words 'sister concern' have to be appreciated and even otherwise undervaluation is with regard to the same person to whom an article is sold at a particular amount and in regard thereto, documentary evidence is prepared for a lesser amount. it is common knowledge that with reference to the varieties of customers, sale at different prices can never be understood to get the nomenclature of undervaluation. we have examined the decision of the first appellate authority as well as of the tribunal and this obvious defect has remained to be treated in the same fashion as if there is undervaluation.3. thereafter, we find another aspect in the matter of ascertainment of stock of each item which were under different stages of processing, along with the situation that the sister concerns were also having more or less manufacturing and dealings of same type of goods. in this connection, we find that in penalty proceedings, when the matter was before the board of revenue, the board of revenue appears to have reduced the penalty initially imposed under section 45a of the act from rs. 10,000 to rs. 5,000, contemplating a situation of overlapping to some extent. we also find, in regard to this position, that the board of revenue, in the process of its analysis, recorded a conclusion that the alleged excess under semi-finished aluminium vessels will have to be understood as reduced to 1,117.4 kg. as against 2,543.3 kg. and also a conclusion with regard to the finished aluminium vessels to be only 72.6 kg as short due to error in re-weighing. a contention is raised in regard thereto, therefore, that the omission attributable to this feature also would get reduced correspondingly. we find that when valuation of rs. 88,460 in regard to 2,543.3 kg. is found, correspondingly, valuation with regard to 1,117.4 kg. would also get reduced more than 50 per cent on the basis of difference of weight and it would be approximately rs. 42,000 on that basis. examining the situation on reading of the orders of the three authorities, we find that these two aspects staring in the face of the record with reference to the consequences appear to have been ignored. in our judgment, these two aspects also should reflect on the ultimate relief in the matter.4. in regard to this, we also find that addition of 30 per cent to the declared sales has been reduced to 20 per cent by the first appellate authority, which is confirmed by the tribunal. the first appellate authority did not disturb the addition of 70 per cent to the added turnover as purchase turnover. the tribunal also has not disturbed this situation.5. therefore, as stated above, the above two aspects must reflect with reference to the grant of relief in the matter of addition in the situation. giving an anxious thought to the situation, we would not like to disturb the addition of 20 per cent granted by the first appellate authority and confirmed by the tribunal. however, for the above reasons, we reduce the addition to 40 per cent of the added turnover as purchase turnover. accordingly, we direct that the authorities shall complete the proceedings on the above basis of 20 per cent to the declared sales and 40 per cent to the added turnover as purchase turnover.the tax revision case gets disposed of as above.