Case Law Details
Berger Paints India Ltd Vs Commissioner of Trade and Taxes Delhi (Delhi High Court)
Delhi High Court held that as discrepancies in sales figures as well as physical stock not explained, the assessing authority took a fair view in enhancing sales by 10% of net GTO after deducting the stock transfer figure of GTO. Accordingly, levy of tax with interest confirmed.
Facts- The appellant is engaged in the business of manufacturing and marketing of paints and allied products. It is having its headquarters at Kolkata and its network is spread throughout the entire length and breadth of the country. The appellant is having Sales Tax Registration under DST Act. It is claimed that appellant is having its factories outside Delhi and used to send goods for storage to Delhi unit from where sales were made.
A team of enforcement officials conducted a survey at the premises of the appellant in Delhi and certain documents including diaries of sales persons and certain gate passes were seized. The Sales Tax Officer, Enforcement eventually passed an assessment order u/s. 23(3) of the DST Act directing the appellant to pay a sum of Rs. 59,49,503/-, comprising of tax component to the tune of Rs. 32,34,254/- plus interest amounting to Rs. 17,26,249/- and penalty for a sum of Rs. 10,00,000/-, primarily based on variations in physical stock in comparison to the stock in record. The demand of DST was computed by increasing the sales value of the goods.
Further, it was also alleged that the goods were transferred from the Delhi branch to the Faridabad and Ghaziabad branches on receiving orders from certain dealers and accordingly, an assessment order was issued u/s. 9 of the Central Sales Tax Act, 1975 directing the appellant to pay Rs. 58,43,131/- and the demand of Central Sales Tax was computed by treating 10% of the stock transfer as inter-State sale.
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