HC : Absent proper records, upholds 10% gross-profit adoption for arriving 'works contract' liability

HC upholds Tribunal’s adoption of 10% gross profit for working out deemed sales value of goods transferred during works contract execution, under Tamil Nadu VAT Act, 2006 (TNVAT Act); Dismisses assessee's contention that Tribunal failed to consider assessee’s books of accounts and that adoption of thumb rule of 10% Gross Profit disregarding the actual gross profit as certified by CA was based merely on surmises and approximation; Finds that Tribunal, on noting that assessee did not maintain proper accounts and failed to produce related records, affirmed adoption of conventional method of 10% notional gross profit on purchase effected for arriving at deemed sales turnover; Also rejects assessee’s plea of natural justice principles violation, as well as its reliance on Income Tax ruling of Kerala HC in Joseph Thomas & Bros’ wherein it was held except assessment u/s 144, opportunity of being heard, shall be given in respect of any material gathered basis any enquiry; Holds that, adoption of 10% gross profit is in vogue ever since introduction of Section 3B of Tamil Nadu General Sales Tax Act, 1959 and continues even for liabilities relating to Section 5 of TNVAT Act : Madras HC