1959 (11) TMI 41 - DSC - VAT and Sales Tax

Summary

Issues:
Reasonableness of best of judgment assessment based on past assessments and returns.

Analysis:
The case involved a second revision before the Board to determine the reasonableness of a best of judgment assessment made on a sweet-meat seller. The petitioner had initially submitted a return for Rs. 16,034, which was not accepted due to unreliable accounts. The Assistant Sales Tax Superintendent assessed the turnover at Rs. 45,000, which was later reduced to Rs. 37,000 in the first appeal and further reduced to Rs. 35,000 in the revision before the Deputy Commissioner.

The petitioner's advocate argued that even the reduced assessment of Rs. 35,000 was unjustified based on past assessments. The history of assessments for the petitioner showed that for four years, returns were accepted, and assessments were made accordingly. In the remaining two years, best of judgment assessments were done, but the turnover did not exceed Rs. 22,000. The Board agreed that unless there were grounds to show a significant increase in sales for the year in question, an assessment of Rs. 35,000 could not be supported. The Inspector's report lacked a basis for estimating a daily sale of Rs. 200, and factors like shop location and operating period remained constant over the years, providing no explanation for a substantial increase in turnover. Consequently, the Board deemed it appropriate to reduce the turnover for assessment to Rs. 24,000, considering the slight increase over the previous year's return.

Ultimately, the petition was allowed on the terms of reducing the turnover for assessment to Rs. 24,000, acknowledging the higher amount returned by the assessee compared to the previous year.