2010 PLP (Trib (PTD)

MUHAMMAD IBRAHIM KHAN, MEMBER (JUDICIAL).

This appeal has been filed by Messrs MAKK Beverage and Mineral Water (Pvt.) Ltd, Peshawar (hereinafter called as the appellants) against the Order-in-Appeal No.498 of 2008, dated 9-9-2008, passed by the Collector of Customs, Sales Tax and Federal Excise (Appeals), Peshawar.

2. Precisely, the stated facts of the case as recapitulated from the available case record are that during the course of audit of the accounts of the appellants for the financial year 2005-2006 along with Income Tax Returns for the tax year 2006 and sales tax profile for the same period, revealed that the appellants had made supplies of bottles, crates, pallets, worth Rs. 128,538,759 and stocks, store and finished goods, worth Rs.3,926,328 and failed to pay sales tax amounting to Rs. 19,280,894 and Rs. 588,949, respectively. Total sales tax on these score comes to Rs. 19,869,763 as principal amount as required under the law. The supply of said goods was taxable under section 3 of the Act as held by honourable Supreme Court of Pakistan in its judgment in Civil Appeal No. 2687 to 2696 of 2001, etc. dated 5-3-2007. Hence, the appellants were alleged to have violated sections 2(33) and (37), 3, 6, 22, 23, 26, 36(1), punishable under section 33(1) clauses (5), (8), (10), (11), (13), (19) and section 34 of the Sales Tax Act, 1990. Subsequently, the appellants were confronted with the allegations vide letter dated 16-4-2007, followed by a reminder dated 2-5-2007 and subsequent letter dated 21-5-2007. Later on, the reply of the appellants dated 18-5-2007 was thoroughly examined in which they have admitted that these assets were purchased from the start of business and the same were taken back by Messrs Coca Cola Co. They were also asked to furnish franchise termination agreement dated 21-5-2007, but they failed to furnish the same.

3. Accordingly, a show-cause notice was issued to the appellants and after hearing the parties, the learned Additional Collector of Customs, Sales Tax and Federal Excise (RTO), Peshawar vide his Order-in-Original No. 26 of 2007, dated 5-10-2007 ordered as under: "(1) I have gone through the written and verbal arguments of the prosecution and the authorized representative of the respondent and the case-law submitted along with written arguments/ comments the respondent's representative has raised objection to the utilization of information obtained from Income Tax Department for the purpose of initiating the proceedings. He has argued that the same cannot be utilized against the registered person. He was asked if he denies the authenticity of the copies of annual accounts obtained from the Income Tax Department. He did not deny that annual accounts were not those of Messrs MAKK Beverages but he stated that the same could not be utilized for framing sales tax contravention proceedings. Deputy Collector (HQ) who represented the Department referred to judgment of the honourable Supreme Court in Messrs Moula Bukhsh Corporation Sargodha wherein the honourable Supreme Court has upheld the addition to income by the Income Tax Officer on the basis of information of declaration of excess stock to a bank. He also referred to the judgment of Sales Tax Appellate Tribunal, Peshawar reported as 2003 PTD (Trib.) 1844, wherein Appellate Tribunal has depreciated the petitioner's contention that annual accounts filed before Income Tax Authorities cannot be used for sales tax proceedings. Relevant para. reproduced as under: "(d) Allegation No. (iv) relating difference in amounts of sales as per the sales tax record as against the financial statement in annual accounts.

The records for sales tax purposes are prescribed under section 22 of the Sales Tax Act, 1990. These records are maintained on day to day basis or as-and-when occurring basis or on monthly basis and are micro in nature. It is on the basis of such (micro) accounts and record that the Financial Statements in Annual Statements (a macro account) (of a limited company is prepared and audited by chartered accountant for the purpose of the Companies Ordinance and are used by share holders, income tax assessors, banks, sales tax officers or others, unlike an income tax return, this financial statement and annual account are not confidential documents under the law. Appellants have not produced any certificate from the Chartered Accountant (preparing and certifying the said financial statements and Annual Account) that the statement or account, so prepared by them, was false or untrue and to what extent. The plea taken by the appellants is strange that business enterprises should be allowed to prepare and prescribe varying accounts, to suit their interest for presentation before various persons and agencies and that one agency should not reconcile and satisfy the truthfulness of the account submitted before him with the other public documents containing similar accounts or similar-bases accounts. The audited figures given by the appellant, at free will and without coercion, in their Financial Statement and Annual Account falsify the sales tax accounts (prescribed under section 22 of the Sales Tax Act, 1990) prepared by or for the appellant. It is the duty of every prudent share-holder or tax official or auditor or investigator to look into such accounts and reconcile them with a view to the plea advanced by the appellant in this regard and confirm the portion of the impugned order relating to this allegation." In view of the above judgment, I see no substance in the arguments of respondent and the case-law referred by him for the reasons that: (i) Judgment of Hon'ble Supreme Court being superior law is binding on all. (ii) Judgment of Customs, Federal Excise and Sales Tax Appellate Tribunal, Peshawar being latest and binding on this office has also decided a similar issue in favour of the Department. In view of above, I reject respondent's contention on this point. (2) Respondents in their initial replies have admitted that the bottles, crates and pallets were purchased from the start of the business. In this respect, extract of their reply is reproduced as under:-- The bottles, crates and pallets were shown as amounting to Rs.128,538,759 represent the purchases of the bottles which were made from the start of business as accumulated balance and on the same time the liabilities were also shown against bottles etc., amounting to Rs.108,290,073 as deposit. We were having filing rights of Coca Cola, therefore, we were not in a position to sell the bottles, on ceasing of franchise all items including bottles having coca cola logo were taken back by the coca cola company whether it was lying with stockist in the market." In its subsequent arguments, the respondent has denied to have sold these assets. He however, could not explain how these assets disappeared from the balance sheet. The respondent has stated that he has not received any consideration for the empties. These had to be taken off the balance-sheet upon the termination of franchise agreement. He failed to explain the corresponding decrease in liabilities appearing in the balance sheet. Details are as under:-- S.No. Items 2006 2005 Decrease

1. Long term loan 24000000 34000000 10000000

2. Long term finance and liabilities 174536256 20,6250890 32,71,4634

3. Current maturity of long term loans. -- 8000000 8000000

4. Creditors accounts and others liabilities 51871457 158878877924 107066517 Total Decrease 147781151 Anyone slightly conversant with double entry system of accounting would conclude that the funds received on account of disposal of assets were utilized to reduce the liabilities as the registered person had no other source of funding. In view of above, respondent's contention that the assets were not disposed off, being far from reality and negation of his own annual account is hereby rejected. (3) Respondents have next contended that judgment of Hon'ble Supreme Court announced in C.As. Nos. 2687 to 2696, dated 5-3-2007 is not applicable to their case. The relevant para. is reproduced as under:-- "That the Hon'ble Supreme Court of Pakistan judgment in the case of Collector of Customs, Sales Tax and Federal Excise v. Messrs. Sanghar Sugar Mills, etc., reported as PTCL 2007 CL. 565, referred to in the show-cause notice, is not relevant in this case because the deposit/security against the assets has not been considered as income even by the Income Tax Department. According to the judgment, the income from sale of the assets, if used in the business for promotion of taxable activity, the supply is taxable. Value or the deposit against the assets declared in the audited accounts does not represent income as no sale has taken place." The honourable Supreme Court has declared in its judgments that sale of fixed assets (plant and machinery, scrap, etc.) used in furtherance of taxable supply is liable to sales tax. It has not declared that only those assets whose income is taxable shall be charged to sale tax. In the present case on disposal of these assets the proceeds have been utilized in reducing the existing liabilities of the company and further these assets were also used in making taxable supplies prior to their disposal. Accordingly, respondent's contention that this judgment does not apply to his case is baseless and is hereby rejected. This judgment is on all fours with the facts and circumstances of the present case. (4) Handing over of assets to client does not fall in the definition of supply. Respondent at para. 4 of their written arguments had taken the plea that temporary handing over of assets to clients does not tantamount to sale. In this respect it is clarified that the department has never framed the contravention on this basis. These assets were in the use of distributors and the department has not objected to its use. It is only when the assets have been sold to, Coca Cola company as part of a package deal that the department has framed a contravention case for the recovery of sales tax paid on the sales of the assets to Coca Cola Company. (5) The respondents have declared that they have concealed nothing from the department and all transactions have been truly depicted in the audited annual accounts. This plea has been examined, the respondents have not declared this transaction in its sales tax returns filed with the department. There could still be an argument in favour of correct declaration had it declared the transaction as zero-rated or exempt but complete non-declaration of the sales disposal of these assets in sales tax returns shows the deliberate act on the part of the respondents to conceal the transactions from this department. The contention that the results were declared in audited annual account and hence no penalty and additional tax is called for is also not acceptable for the reason that the same were obtained by the department after receipt of information of non-payment of tax by the respondent on disposal of fixed assets and were never filed by the registered person. In view of the above, I conclude that the action of non-declaration of taxable transactions is deliberate and falls under the purview of section 36(1) of the Sales Tax Act, 1990. In view of finding reviewed in preceding paras, I, have concluded that the charges/obligations levelled in the show-cause notice stand fully established. I hereby order for the recovery of principal amount of Sales Tax amounting to Rs.19,869,763 along with default surcharge under section 34 and impose penalty under sections 33(1) Clauses (5), (8), (10), (11), (13) and (19) of the Sales Tax Act, 1990."

4. Being aggrieved by the impugned Order-in-Original, the appellants flied an appeal before the Collector of Customs, Sales Tax and Federal Excise (Appeals), Peshawar, who vide his Order-in-Appeal No.498 of 2008, dated 9-9-2008, ordered as under:-- "(15) I have gone through the case record and considered the written as well as verbal submissions of both the parties. On perusal of the case record, it is observed that: (I) Assets were handed over to Coca Cola International for consideration which was the overall franchise termination agreement. The registered person was repeatedly asked by the department to furnish details of the consideration received but the appellant failed to provide the same. (II) The consideration received was utilized in reducing the overall liabilities in the balance-sheet beside its reflection in the profit and loss account wherein a part of these receipts was declared as capital receipts amounting to Rs.55,200,000. (III) The audited account as on 30-6-2005 reflects the value of assets at Rs.128,538,759, which were subsequently disposed of during the year ending 2006. These accounts were audited by a firm of the Chartered Accountants and the decrease in liabilities was worked out from the balance-sheet of the appellant. (IV) Value of supply did not envisage that before charging Sales Tax on supply of any Asset, the liabilities against that asset should be excluded from the total value. Sales Tax is chargeable on total value of supplies irrespective of the fact that the supplies have been made either on credit or cash or any other consideration. (V) The honourable Supreme Court in its judgment held as under:- "there is no legal provision excluding the sale of old plant and machinery, vehicles or scrap from the purview of taxable supply. These goods were purchased by the respondents (registered persons) in the course of their taxable activity, their sale cannot he considered as a transaction which is divorced from their normal business and that the said goods are business assets of the respondents (registered persons) and both their purchases and sales are part of their normal business activity." (VI) The appellant sold out bottles (empties), crates etc., which were part of the fixed assets of the business of the appellant. (VII) The appellant declared sales of manufactured goods even after disposal of these assets which reflects that it was not the disposal of an ongoing concern. The balance-sheet, and depreciation chart still shows land, building, plant and machinery being in possession of the appellant. (VIII) It was admitted in the initial replies that they purchased these assets which were taken back by Coca Cola International on the termination of franchise agreement. (IX) The Honourable Customs, Central Excise and Sales Tax Appellate Tribunal, Peshawar in its judgment reported as PTD 2003 (Trib.) 1844 also upheld that Sales Tax levied on the basis of Annual Accounts filed with Income Tax Department is totally justified. Relevant portion of judgment is reproduced as under: "Sections 3, 22, 34 and 33

Companies Ordinance (XLVII of 1984), S.255

Levy of tax

Scope

Records

Difference in amounts of sales as per sales tax records as against Financial Statement and Annual Accounts--Levy of sales tax on suppressed sales along with additional tax and penalty--Assessee contended that Financial Statement was prepared for purposes of Bank Loan and income tax and could not be relied upon for sales tax purposes--Sales Tax Returns were filed as per Sales Tax Act, 1990, on taxable supplies defined under section 2(46) of the Sales Tax Act. 1990 and this had no nexus with the Income Tax Returns under the Income Tax Ordinance, 1979--Validity

Records for sales tax purposes were prescribed under section 22 of the Sales Tax Act, 1990 and were maintained on day to day basis or as and when occurring basis or on monthly basis and were micro in nature

Financial Statement and Annual Statement (a micro account) was prepared and audited by Chartered Accountant for purpose of Companies Ordinance, 1984 and used by shareholders, income-tax assessors, Banks, Sales Tax Officers or others--Unlike an Income-tax Return, such Financial Statement and Annual Account was not a confidential document under law

Assessee had not produced any certificate from the Chartered Accountant that the Financial Statement and Annual Account was false or untrue and to what extent

Business enterprises should not be allowed to prepare and prescribe varying accounts, to suit their interest, for presentation before various persons and agencies and that one agency should not reconcile and satisfy the truthfulness of the account submitted before him with the other public document containing similar accounts or similar basis accounts

Audited figures given at free-will and without coercion, in Financial Statement and Annual Account falsify the Sales Tax Accounts prepared by or for the assessee--Every prudent shareholder or tax official or auditor or investigator was bound to look into such accounts and reconcile them with a view to detecting tax evasion or misdeclaration, if any--Appellate Tribunal confirmed the order of the Adjudicating Officer." [Customs, Central Excise and Sales Tax Appellate Tribunal N.-W.F.P.] (16) The Collectorate was directed to depute a well-versed officer vide letter dated 13-2-2008 to reconcile the figures from Messrs A. Salam Jan and Co., Chartered Accountant, F.C. Trust Building, 4th Floor, Sunehri Masjid Road, Peshawar Cantt. with the association of the appellant and submit comprehensive report. In response, Messrs A. Salam Jan and Co., have also confirmed vide their letter dated 6-3-2008 that the representative of the appellant failed to explain the nature of disposal of bottles, crates and pallets. (17) Moreover, the report of Mrs. Tariq Ayub Anwar and Co. Peshawar is found contradictory because in para.3(vi) it has been stated that:-- "The following stocks are said to have been transferred to Shahi Beverages (Pvt.) Ltd. As the Franchise of MAKK Beverages and Mineral Water (Pvt.) Ltd. was cancelled by Coca Cola Internationals." Whereas in para. 5(d), the firm has reported as under:-- "Coca. Cola Corporation off and on changes the designs of the Bottles. The old bottles are withdrawn from the market and destroyed so that these may not fall in the banks of plagiarists. The bottles so destroyed as charged as bursts and breakages in the profit and loss accounts and credited to deposits." (18) The appellants have furnished certificate from their Chartered Accountant to the effect that the value of assets was to be considered by deducting the depositor's accounts which appeared on the liability side of the balance-sheet. This concept is totally alien to Sales Tax Act, 1990. It has not been provided that value of supply shall be worked out after deducting the liabilities incurred in respect of those supplies. In view of above, appellant's contention being without any merit is rejected. (19) Balance-sheet of the company as on 30-6-2005 shows: (i) Bottles, crates and pallets = Rs. 128538759 (ii) Stock Stores and finished products = Rs. 3926328 (iii) Total: = Rs. 132465087 These assets are not reflected in the Balance-Sheet as on 30-6-2006. There is a corresponding decrease in the liabilities as well. It clearly shows that these assets were disposed off for a consideration and therefore liable to sales tax in the light of honourable Supreme Court's judgment. (20) Regarding appellant's contention that the figures of breakage were not considered because before subjecting the current assets to levy of sales tax is concerned, the same is not tenable in view of the fact that whatever is the value of breakages/brustage the same has been claimed as an expense in the profit and loss account and therefore, the balance-sheet value is the net value of these assets. (21) The appellants' contention that the sale of these assets is not liable to sales tax in view of the provisions of section 49(2) of the Sales Tax Act, 1990 has been examined. I am of the considered opinion that the provision of section 49(2) of the Sales Tax Act, 1990 does not apply in the instant case for the reason that in the present case, current assets have been sold out whereas section 49(2) of the Sales Tax Act, 1990 applies to the disposal of taxable activity or part thereof to another registered person as an On Going Concern. The disposal of current assets was not sale of an On Going Concern as the registered person has declared sales of manufactured goods, even after disposal of these assets, which reflects that it was not the disposal of an ongoing concern. The balance-sheet and depreciation chart still shows land, buildings, plant and machinery being in possession of the appellant. In view of the above, this plea of the appellant being without any merit is rejected. (22). Keeping in view the above facts, overall circumstances of the case, reports of the Chartered Accountants/Collectorate and the judgments of the Superior Court, it is proved that the appellant has nothing to defend the case, therefore, the appeal being without any merit is rejected and the Order-in-Original No.26 of 2007, dated 20-10-2007 is upheld."

5. Being further aggrieved by the impugned Order-in-Appeal, the appellants filed the instant appeal to this Tribunal on, inter alia, the following grounds:-- Para. 15 (a) In this connection, it is submitted that the learned Appellate Authority was provided balance-sheet depicting receipts/income (debit and credit) which never showed sale of bottles, or any income received in this regard. This balance-sheet was accepted by the Income Tax Department and no income tax was levied under this head; (b) That the learned respondent has incorrectly interpreted the details given in balance-sheet. The capital receipt is totally different. An amount of Rs.55200000 has been shown in profit and loss appropriation account which has no bearing on income; (c) That report of Chartered Accountant namely Messrs Tariq Ayub and Co., on this point as reproduced in para.12 of the impugned order's is very clear. A certificate was issued by Messrs Ali and Co., Chartered Accountant on account of stock of bottles who was the auditor for the years, 2005 and 2006. This certificate was confirmed by the Chartered Accountant namely Tariq Ayub and Co., appointed by the learned respondent. The certificates given by the two experts and further endorsed by Messrs Shahid Waheed Yunis Jamil, Chartered Accountants cannot be ignored. The observation of the learned respondent is therefore, not correct; (d) That Messrs Tariq Ayub and Co., Chartered Accountants appointed by the respondent in report on page 14 of the impugned orders have already clarified that deposit account is not liability but represent burst and breakages. In conclusion, the said accountants have endorsed the certificate regarding stock of Rs.20248686 as correct; (e) That the learned respondent has referred to the portion of para. of honourable Supreme Court's judgment which suited him. In the same para. the honourable Supreme Court has held that "such income being part of business and investing activities done during the course of business is an act of furtherance of business." The case of appellant is that after termination of franchise in 2005 and the closure of unit in 2003, the income if any was not invested in the furtherance of the business activities. The said judgment does not therefore, apply in the appellants' case; (f) That on this point, the certificate dated 11-12-2007 given by Messrs Ali and Co. Chartered Accountants is quite clear; (g) That the observation is in connection with provisions of section 49(2) of the Act. The sale of PET bottles was shown during the period of franchise. Thereafter, there-was no business activities. The case in hand relates to the period ending 2006 whereas franchise was terminated in December, 2005. Franchise is the basic tool as after cancellation of franchise, the appellants' machinery and building became idle. The provisions of section 49(2) have been rightly invoked; (h) That the bottles in market bear logo of Coca Cola and cannot be sold by the appellants because the filling right of beverages did not rest with the appellants on termination of franchise; (i) That the judgment cited is not applicable in appellants case because in that case the assessee declared excess sale in income tax return and admitted the same whereas in appellants' case no sale was declared. Moreover, in the said judgment it has been observed that the assessee did not produce any certificate from the chartered accountant to the effect that the financial statement and annual accounts were false or untrue to what extent. In appellants' case three certificates from different Chartered Accountants are on record; Para 16 (j) That the allegation is incorrect. It is on record that the requisite documents were sent through courier service to the Chartered Accountant Messrs A. Salam & Co. Para 17 (k) That there is no contradiction. As a matter of fact observation of the firm in para. 5(d) supports stand of the Company; Para. 18 (l) That observation is misconceived. The very case has been instituted on the basis of balance-sheet filed with Income Tax Department and is therefore to be considered in the light of report of Chartered Accountant in regard to stocks of bottles and crates; Para. 19 (m) That the learned appellate authority has ignored the opinion on the subject given by the experts viz. Chartered Accountants; Para. 20 (n) That the contention of the appellant has been that breakages amount was not deducted from the amount of purchase of bottles and was shown separately in bottle deposit account. Till 2002 the amount of bottle deposit used to be deducted from the amount of purchases and net amount was shown as stock of bottles in the balance-sheet. This version has been supported by the Chartered Accountant Messrs Tariq Ayub and Co.; Para 21 (o) That interpretation is misleading. Taxable activity of the appellant has been manufacturing beverages. Once the franchise was terminated the taxable activities came to an end. Section 49(2) is very much applicable; Para. 22 (p) That the learned Collector has conveniently over looked to give his ruling with reasons about imposition of penalty envisaged in section 33(1) Clauses (5), (8), (10), (11), (13) and (19) and default surcharge under section 34 of the Sales Tax Act, 1990. Penal action in this case is uncalled for as there has not been any wilful evasion as explained in para. 8 of the memo of appeal.

6. On the last searing fixed on 23-6-2009, the learned counsel, assisted by G.M. Finance of the appellants, appearing on behalf of the appellants fully argued his case by almost reiterating the same issues as raised on the previous hearings and as also incorporated in the memo of appeal as well as agitated in the rejoinder (placed on record). On the other hand, the departmental representative, assisted by his Senior Auditors, vehemently controverted the arguments advanced by the learned counsel for the appellants and also reiterated almost the same response as given in the written arguments to the memo of appeal (placed on record).

7. We have carefully perused the available case record and have anxiously considered the written as well as oral submissions made by the learned counsel for the appellants and the D.R. appearing for the respondent-department and now we intend to go into the deeper appreciation of the factual and legal issues involved in this case, in chronological, systematic and legally convincing manner, as given in the succeeding paras, so as to arrive at the proper, just and fair decision in the instant appeal.

8. First Issue: Whether the respondent-Department is legally authorized to conduct audit of sales tax and workout sales tax liabilities on the basis of Annual Audited Accounts/Income Tax returns filed with Income Tax Department? (i) At the very outset, the learned counsel for the appellants (then respondents) raised this contentious issue. He argued that Annual Audited Accounts/ Income Tax Returns obtained from Income Tax department cannot be utilized for framing sales tax contravention proceedings. On the other hand, the D.R. rebutted his argument in this behalf and placed reliance on the judgment of the honourable Supreme Court of Pakistan in the case of Messrs Moula Bukush' Corporation, Sargodha, wherein the apex Court has upheld the value addition to income by the Income Tax Officer on the basis of information of declaration of excess stock to bank. (ii) Besides the foregoing citation of the honourable Court, section 25 of the Sales Tax Act, 1990 also empowers the Sales Tax Officers. to check the records, during the course of audit, being maintained under any other law: In this context, section 25 of the Sales Tax Act, 1990 is reproduced in verbatim as under for the sake of convenience:- "

25. Access to record, documents, etc:

(1) A person who is required to maintain any record or documents under this Act or any other law shall, as and when required by an officer of Sales Tax, produce record or documents which are in his possession or control or in the possession or control of his agent; and where such record or documents have been kept on electronic data, he shall allow access to such officer of Sales Tax and use of any machine on which such data is kept. (2) The officer of Sales Tax, on the basis of the record, obtained tinder subsection (1), may, once in a year, conduct audit:" (iii) It is crystal clear from the perusal of subsections (1) and (2) of section 25 of the Sales Tax Act, 1990 that the sales tax officer is empowered to obtain and conduct the audit of the records being maintained under any other law besides the records being maintained under the Sales Tax Act, 1990. We are, thus, of the considered opinion that the Annual Audited Accounts are statutory documents being maintained under the Companies Ordinance, 1984 while the Income Tax Return is also a statutory document under the Income Tax Ordinance, 2001. Therefore, the declarations made in such documents are self-declarations by the appellants and the respondent-department is legally authorized to conduct audit on the basis of such ' statutory documents under the provisions of the Sales Tax Act, 1990. We find that there is no substance in the arguments of the learned counsel for appellants in this behalf and the instant issue is thus, decided in the aforesaid manner.

9. Second Issue: Whether the appellants have disposed of the Locks/assets without payment of Sales Tax leviable thereon? (i) The crucial issue involved in the instant case which has formed the basis for issuance of show-cause notice is, that whether the appellants have disposed of their stocks/assets without payment of sales tax leviable thereon? In order to resolve this controversy and to arrive at the just and fair conclusion of the instant case, it would he appropriate to reproduce the relevant part of the Balance Sheet of the appellants as on 30th June, 2005 and 2006, as hereinunder

CURRENT ASSETS: 30th June, 2005 30th June, 2006 Bottles, Crates & Pallets 128,538,759

Stocks, Stores and Finished 3,926,328 Products Total: 132,465,087 (ii) The cursory view of the balance-sheet of the appellants as on 30th June, 2006, reveals that the above assets which were available on the balance-sheet as on 30th June, 2005, have not been reflected in the balance sheet of the subsequent period i.e. 30th June, 2006, meaning thereby that assets amounting to Rs.132,465,087 were disposed of without payment of sales tax and the proceeds realized from such disposal of stocks/assets were utilized for payment of their outstanding liabilities as there is a corresponding decrease of liabilities in the balance-sheet as on 30th June, 2006. (iii) During the entire hearing proceedings, the appellants could not explain as to how these assets disappeared from their balance-sheet and how their liabilities decreased enormously when they were not having any alternate source of funding. The appellants contended that they have prepared the balance-sheet in accordance with the amended International Accounting Standards (IASs), but they could not provide any documentary evidence with regard to International Accounting Standards (IASs) for preparation and presentation of Balance Sheet to substantiate their plea. Needless to mention here that it is the fundamental principle of accounting that assets are always equal to liabilities in the Balance Sheet (Assets Liabilities) and increase or decrease in assets has always corresponding effect on the liabilities of the balance sheet. Perusal of the Balance Sheet reveals that appellants followed this universally accepted principle of accounting. However, vanishing of such huge value of assets from the Balance Sheet and corresponding decrease in the liabilities of the appellants as on 30th June, 2006 is itself irrefutable evidence against the appellants and thus, we are constrained to be dragged to form an irresistible opinion that there is no substance in the arguments of the learned counsel for the appellants on this count. (iv) In view of the above stated position, we have no hesitation to conclude that the appellants disposed of assets amounting to Rs.132,465,087 without payment of leviable sales tax and thus, utterly failed to discharge their obligations under the Sales Tax Act, 1990.

10. Third Issue: Whether further inquiry during the hearing proceedings conducted by the learned Collector (Appeals) is in conformity with the provisions of the Sales Tax Act, 1990? (i) The last but not the least issue involved in the instant case is that whether further inquiry including opinion of different Chartered Accountants is in conformity with the provisions of the Sales Tax Act, 1990? In this context, it would be relevant to reproduce section 45-B(3) of the Sales Tax Act, 1990, as hereinbelow: "45B(3). In deciding an appeal, the Collector of Sales Tax (Appeals) may make such further inquiry as may be necessary provided that he shall not remand the case for de novo consideration." (ii) In view of the above, we are of the considered opinion that the learned Collector (Appeals) has conducted further inquiry under the expressed provisions of the Sales Tax Act, 1990 and all the relevant facts have been incorporated in the impugned Order-in-Appeal. Thus, in our opinion, there is no need for any further f inquiry into the matter by this forum.

11. In view of the foregoing factual and legal position and keeping in view the overall circumstances of the case, we find no impropriety or illegality or material irregularity in the impugned order- in-appeal and thus, we see no reasons to interfere with the same, as such, the instant appeal stands dismissed being without any material substance.

12. This judgment consists of fifteen (15) pages, and each page bears our official seals, signatures and corrections where found necessary.

13. Announced.

14. Attested copy of this judgment be dispatched to the concerned parties within ten (10) days of passing of the same. C. M. A./67/Tax(Trib.) Appeal dismissed.