Bhairav, LLC d/b/a Ava's Market v. Commissioner of Revenue (March 20, 2025)

COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD
BHAIRAV, LLC
d/b/a AVA’S MARKET
v. 	COMMISSIONER OF REVENUE
Docket No. C348459 	Promulgated:
March 20, 2025
This 	is 	an 	appeal 	filed 	under 	the 	formal 	procedure 	pursuant
to G.L. c. 58A, § 7 and G.L. c. 62C, § 39 from the decision of the
Commissioner 	of 	Revenue 	(“appellee” 	or 	“Commissioner”) 	to 	revoke
an 	electronic 	nicotine 	delivery 	systems 	(“ENDS”) 	retailer’s
license held by Bhairav, LLC d/b/a Ava’s Market (“Bhairav, LLC” or
“appellant”).
Commissioner 	Metzer 	heard 	the 	appeal. 	Chairman 	DeFrancisco
and 	Commissioners 	Good, 	Elliott, 	and 	Bernier 	joined 	her 	in 	the
decision for the appellee.
These findings of fact and report are made at the request of
the appellant pursuant to 831 CMR 1.34.
Edward F. Grourke, Esq., for the appellant.
Eugene Langner, Esq. and James P. Burbridge, Esq. for the
appellee.
ATB 2025-45

FINDINGS OF FACT AND REPORT
Based 	on 	testimony 	and 	documents 	admitted 	into 	evidence
during 	the 	hearing 	of 	this 	appeal, 	the 	Appellate 	Tax 	Board
(“Board”) made the following findings of fact.
At 	all 	times 	relevant 	to 	this 	appeal, 	the 	appellant 	was 	a
Massachusetts 	limited 	liability 	company 	managed 	by 	Sakshi 	Kishan
(“Mr. 	Kishan”). 	The 	appellant 	owned 	and 	operated 	Ava’s 	Market, 	a
convenience store located in Plainville that was licensed to sell
products 	that 	were 	subject 	to 	the 	Massachusetts 	tobacco 	excise:
cigarettes and smokeless tobacco, cigars and smoking tobacco, and
ENDS products. Mr. Kishan also owned a second establishment, Cigar
City Smoke Shop, a smoke shop located in North Attleboro.
On 	May 	16, 	2023, 	the 	Massachusetts 	Department 	of 	Revenue
(“DOR”) 	issued 	a 	notice 	to 	the 	appellant 	stating 	that 	the
Commissioner was revoking the ENDS retailer’s license held by Ava’s
Market as of June 12, 2023. The letter justified revocation of the
license for violations of the following: (1) G.L. c. 64C, § 7E(b),
which 	imposes 	upon 	a 	retailer 	an 	excise 	of 	75 	percent 	of 	the
wholesale 	price 	on 	all 	ENDS 	products 	at 	the 	time 	they 	are
manufactured, 	purchased, 	imported, 	received, 	or 	acquired 	in 	the
Commonwealth; 	(2) 	G.L 	c. 	64C, 	§ 	7E(c), 	which 	deems 	every 	ENDS
retailer liable for the collection of the excise on ENDS products
in their possession at any time; (3) G.L. c. 64C, § 7E(l)(1), which
prohibits acting as an ENDS distributor without a license; and/or
ATB 2025-46

(4) 	G.L. 	c. 	62C, 	§ 	16(c 	3/4), 	which 	requires 	licensees 	to 	file
with 	the 	Commissioner 	a 	tax 	return 	stating 	the 	quantity 	of 	ENDS
products sold. The Commissioner exercised his authority to revoke
the 	referenced 	license 	under 	G.L. 	c. 	62C, 	§ 	68 	(“§ 	68”),
specifically § 68(5), which authorizes the Commissioner to suspend
or revoke a tobacco license if, among other reasons, “the licensee
has 	willfully 	failed 	to 	comply 	with 	any 	provision 	of 	the
Commonwealth’s tax laws.”
On May 24, 2023, the appellant filed a timely appeal with the
Board.1 	The 	appellant 	also 	filed 	the 	appropriate 	surety 	bond 	in
accordance 	with 	§ 	68. 	Based 	on 	the 	above 	facts, 	the 	Board 	found
and ruled that it had jurisdiction to hear and decide the instant
appeal.2
The 	appellant 	did 	not 	present 	any 	witnesses 	or 	evidence,
choosing 	instead 	to 	cross-examine 	the 	appellee’s 	witness. 	The
appellee 	presented 	his 	case 	in 	chief 	through 	the 	testimony 	of
Michael 	Azevedo, 	a 	tax 	fraud 	investigator 	for 	the 	DOR 	Criminal
Investigation 	Bureau, 	and 	the 	submission 	of 	evidence, 	including
investigation reports with supporting documentation.
1 While the petition was stamped as having been docketed by the Board on June
1, 	2023, 	the 	envelope 	containing 	the 	petition 	bore 	a 	United 	States 	Postal
Service 	postmark 	of 	May 	24, 	2023. 	Pursuant 	to 	G.L. 	c. 	58A, 	§ 	7, 	the 	Board
considered the date of the postmark to be the date of filing.
2 The ENDS license revocation has been inoperative during the pendency of this
appeal pursuant to § 68, which states: “During the pendency of any such appeal
the 	decision 	of 	the 	commissioner 	so 	appealed 	from 	shall, 	unless 	otherwise
ordered by said board, be inoperative.”
ATB 2025-47

Accord i ng 	to 	I nvestigator 	Azevedo , 	he 	was 	i nvestigat i ng 	an
unrelated 	r e t ailer 	and 	discove r ed 	invo i ces 	f ro m RZ 	Smoke , 	an 	out
o f- s t ate 	tobacco 	vendor 	not 	licensed 	in 	Massachusetts , 	l isting
f l avo r ed 	and 	untaxed 	tobacco 	products 	that 	were 	so l d 	to 	th e
unrelated 	retai l er . 	In 	February 	2023 , 	a f ter 	r equesting 	and
ana l yz i ng 	91 	d i f f erent 	i nvoices 	s h owing 	sales 	of 	RZ 	Smoke 	to
Massac h usetts 	r etaile r s , 	Invest i ga t or 	Azevedo 	dete rmi ned 	tha t
Bha i rav , 	LLC 	was 	one 	of 	the 	top 	purchasers 	f rom 	RZ 	Smoke ,
purchasing $25 1, 593 . 98 worth o f 	ENDS products f r om RZ Smoke between
J une 	2020 	and 	Novembe r 	2022 . 	Inspector 	Azevedo ' s 	f i ndings 	are
r eproduced be l ow :
E N D S E xcise Evasi on B ased On RZ Sm oke I nvoices
Ye ar 	E N DS produc ts
Purc ha se d
END S Tax Lo ss
2020 	$87,146.20 	$65,359.65
2021 	$125,820.27 	$94,365.20
2022 	$38,627.51 	$28,970.63
T otals 	$251,593.98 	$188,695.49
The 	invoices 	sub mit t ed 	i nto 	evidence 	bore 	a 	" PAID" 	stamp 	and
contained 	a 	d i sc l a i mer 	that 	" Buyers 	are 	r esponsible 	f or 	al l 	local
laws 	& taxes . " 	The 	i nvoices 	showed 	t he 	"SHIP 	TO" 	and 	" BI LL 	TO"
addresses 	as 	" Saks h i 	Ki shan , 	Avas 	Market . " 	Inves ti gato r 	Azevedo
a l so 	ob t ained 	rece i pts 	o f 	FedEx 	s h ip men t s 	t o 	Ava ' s 	Market 	o f 	ENDS
products 	from RZ Smoke and copies of checks i ssued by the appellant
to 	RZ 	Smoke 	cor r esponding 	t o 	i nvoices 	to 	Ava ' s 	Market 	f or 	ENDS
products .
ATB 2 0 25-48

Investigator Azevedo conducted a surveillance of Ava’s Market
in March of 2023. Initially, Investigator Azevedo observed a person
unloading 	various 	products, 	including 	water 	bottles 	and 	candy
packages, 	from 	a 	car 	into 	the 	grocery 	store. 	He 	did 	not 	observe
any 	tobacco 	products 	being 	unloaded, 	but 	he 	did 	observe 	a 	box
labeled 	“Marlboro” 	in 	the 	back 	of 	the 	vehicle. 	After 	the 	vehicle
left, Investigator Azevedo went into Ava’s Market and made a brief
inspection 	at 	which 	time 	he 	observed 	various 	ENDS 	products 	for
sale. 	There 	is 	no 	indication 	that 	Investigator 	Azevedo 	checked
whether the ENDS products bore the proper excise stamps.
On 	May 	1, 	2023, 	Investigator 	Azevedo 	together 	with 	a 	second
agent, Investigator Lisa Dell’Anno, investigated Cigar City Smoke
Shop. 	Investigator 	Azevedo 	testified 	that 	he 	decided 	to
investigate Cigar City Smoke Shop because he determined that most
of 	the 	products 	corresponding 	to 	the 	RZ 	Smoke 	invoices 	that 	were
ordered 	and 	purchased 	by 	Ava’s 	Market 	had 	ultimately 	arrived 	at
the Cigar City Smoke Shop location. During this investigation, the
agents observed, photographed, and seized 536 ENDS products.
Investigator 	Azevedo 	prepared 	an 	affidavit 	discussing 	the
findings 	of 	this 	inspection, 	which 	Mr. 	Kishan 	signed,
acknowledging 	the 	following 	facts: 	that 	he 	was 	the 	sole 	owner 	of
Ava’s Market and Cigar City Smoke Shop; that he purchased tobacco
products 	for 	both 	stores; 	that 	he 	had 	continued 	to 	purchase 	ENDS
products 	from 	RZ 	Smoke 	until 	about 	September 	or 	October 	of 	2022;
ATB 2025-49

that he had no invoices from RZ Smoke reflecting a payment of tax
on those purchases; that the products ordered by Ava’s Market were
delivered to Ava’s Market and products ordered by Cigar City Smoke
Shop 	were 	delivered 	to 	Cigar 	City 	Smoke 	Shop; 	that 	products 	were
delivered 	by 	RZ 	Smoke 	delivery 	drivers, 	who 	transported 	products
in 	regular 	cars; 	that 	most 	times 	the 	products 	were 	paid 	for 	with
cash 	that 	was 	removed 	from 	the 	cash 	registers; 	that 	he 	was 	aware
that ENDS products purchased from RZ Smoke were untaxed, which is
why 	he 	ceased 	business 	with 	RZ 	Smoke 	prior 	to 	this 	inspection;
that 	Juul 	Menthol 	and 	Virginia 	5% 	pods 	were 	not 	purchased 	to 	be
sold 	at 	Ava’s 	Market 	because 	he 	knew 	that 	it 	was 	illegal 	to 	sell
these items at a convenience store;3 and that at times he purchased
ENDS products from RZ Smoke that he sold individually to friends.
Investigator 	Azevedo 	testified 	that 	Mr. 	Kishan 	initially
claimed that he no longer bought ENDS products from RZ Smoke after
June 1, 2020, the date on which the ENDS excise went into effect.
However, 	when 	confronted 	with 	four 	Ava’s 	Market 	invoices 	showing
sales 	of 	ENDS 	products 	from 	RZ 	Smoke 	between 	June 	3, 	2020 	and
November 	15, 	2022, 	Investigator 	Azevedo 	said 	that 	Mr. 	Kishan
admitted 	that 	he 	continued 	ordering 	ENDS 	products 	from 	RZ 	Smoke
after 	June 	1, 	2020 	for 	Ava’s 	Market, 	but 	Mr. 	Kishan 	disputed 	the
3 Cigar City Smoke Shop was a smoke shop and was thus allowed by law to sell
these products, while Ava’s Market, a grocery store, was not.
ATB 2025-50

purchase 	of 	approximately 	$251,000 	of 	taxable 	ENDS 	products
reflected in the RZ Smoke invoices.
Responding 	to 	the 	Commissioner’s 	allegations, 	the 	appellant
claimed 	that 	the 	only 	documentation 	obtained 	by 	Investigator
Azevedo 	of 	products 	delivered 	to 	the 	appellant 	were 	two 	FedEx
records from February 19, 2021, which corresponded with one invoice
totaling 	$5,436.48, 	and 	further, 	that 	the 	only 	proof 	of 	payment
by 	the 	appellant 	to 	RZ 	Smoke 	were 	canceled 	checks 	from 	the
appellant’s bank account totaling $30,754.95.
The 	appellant 	further 	countered 	that, 	while 	the 	appellee
introduced 91 invoices from RZ Smoke purporting to show purchases
made by the appellant, none of these invoices showed any signature
reflecting acceptance of delivery by the appellant.
The appellant requested leniency in this case, asserting the
following 	allegedly 	mitigating 	factors: 	the 	appellant 	had 	ceased
doing business with RK Smoke in November 2022, six months prior to
the inspection of Ava’s Market; the appellant never sold any banned
products at Ava’s Market; this investigation represented the only
time 	the 	appellant 	had 	engaged 	in 	any 	wrongful 	action; 	the
appellant 	fully 	cooperated 	with 	the 	investigation; 	and 	a 	license
revocation 	would 	effectively 	terminate 	the 	appellant's 	business
and 	leave 	the 	appellant 	with 	no 	means 	to 	repay 	any 	taxes 	or
penalties.
ATB 2025-51

As 	will 	be 	further 	explained 	in 	the 	following 	Opinion, 	the
Commissioner is charged with enforcing § 68, the statute pertaining
to 	regulation 	of 	licenses 	for 	tobacco, 	including 	ENDS 	products.
Internal DOR guidelines for tobacco excise infractions, which DOR
employs 	to 	ensure 	consistency 	in 	its 	enforcement 	of 	§ 	68, 	allow
license 	revocation 	for 	a 	first-time 	infraction 	involving 	over
$2,808 	wholesale 	value 	of 	ENDS 	products. 	The 	infraction 	here 	was
for 	product 	totaling 	$251,593.98. 	While 	the 	appellant 	disputed
this 	amount 	with 	reference 	to 	cashed 	checks 	and 	FedEx 	invoices,
Mr. Kishan himself admitted that many ENDS products were purchased
with 	cash 	and 	delivered 	by 	regular 	cars, 	and 	thus 	the 	appellant
was 	not 	credible. 	The 	Board 	therefore 	found 	that 	the 	appellant
failed 	to 	meet 	its 	burden 	of 	refuting 	the 	ENDS 	excise 	liability
that was assessed by the Commissioner.
Section 	68 	gives 	the 	Board 	equitable 	powers 	to 	grant 	relief
from these penalties. The appellant asked the Board to invoke its
equitable powers to reduce the license revocation to a suspension.
Based on the evidence advanced at the hearing, and for the reasons
stated 	more 	fully 	in 	the 	Opinion, 	the 	Board 	declined 	to 	exercise
its equitable powers to reverse the license revocation.
Accordingly, the Board issued a decision for the appellee in
the instant appeal.
ATB 2025-52

OPINION
The Commissioner is authorized by § 68 to “suspend or revoke”
a retailer’s tobacco license for, among other offenses, “willfully
fail[ing] 	to 	comply 	with 	any 	provision 	of 	the 	tax 	laws 	of 	the
commonwealth.” The statute affords discretion to the Commissioner
and his delegees in suspending and revoking retail tobacco licenses
for any failure to pay the requisite excise.
With respect to the substantive grounds authorizing penalty,
G.L. 	c. 	64C, 	§ 	7E(c) 	holds 	an 	ENDS 	retailer 	liable 	for 	the
collection 	of 	the 	excise 	on 	all 	ENDS 	products 	that 	are 	in 	the
retailer’s 	possession 	at 	any 	time 	and 	upon 	which 	the 	excise 	has
not 	been 	paid 	by 	the 	ENDS 	distributor. 	Retailers 	thus 	have 	the
burden 	of 	proving 	that 	excise 	has 	been 	paid 	on 	ENDS 	products 	in
their possession. Further, retailers are required to keep complete
and accurate records of all tobacco products purchased or otherwise
acquired 	for 	a 	period 	of 	three 	years, 	and 	to 	make 	those 	records
available for inspection by the Commissioner to determine whether
the excise has been paid.4 G.L. c. 64C, § 11.
The 	Board 	here 	found 	and 	ruled 	that 	the 	appellant 	failed 	to
meet 	its 	burden 	of 	refuting 	the 	ENDS 	excise 	assessment 	by 	the
Commissioner. Whether the products were purchased by the appellant
for 	sale 	at 	Ava’s 	Market, 	at 	Cigar 	City 	Smoke 	Shop, 	or 	anywhere
4 G.L. c. 64C, § 1 provides that “’tobacco products’ shall mean cigarettes, an
electronic nicotine delivery system as defined in subsection (a) of section 7E
and smokeless tobacco.”
ATB 2025-53

~
else 	is 	a 	difference 	without 	distinction 	here, 	as 	the 	applicable
laws penalize a retailer for having untaxed ENDS products “in their
possession at any time.”
According 	to 	documentation 	offered 	by 	the 	Commissioner 	and
not 	rebutted 	successfully 	by 	the 	appellant, 	the 	appellant
purchased 	$251,593.98 	worth 	of 	ENDS 	products, 	of 	which 	at 	least
$30,754.95 was ordered and paid for by Ava’s Market with its checks
and 	of 	which 	at 	least 	$5,436.48 	was 	delivered 	by 	FedEx 	to 	Ava’s
Market. Under the facts of this appeal, the Board found and ruled
that no circumstances existed to warrant exercising the equitable
powers granted to it by § 68.
Accordingly, 	the 	Board 	issued 	a 	decision 	for 	the 	appellee
upholding the ENDS license revocation.
THE APPELLATE TAX BOARD
By: 	__________________________________
Mark J. DeFrancisco, Chairman
A true copy,
Attest: ________________________
Clerk of the Board
ATB 2025-54