1961 (1) TMI 61 - HC - VAT and Sales Tax

Summary

Issues:
Assessment to the best of judgment under section 13(3) of Bihar Sales Tax Act.
Validity of penalty imposed for non-payment of admitted tax.

Assessment to the best of judgment under section 13(3) of Bihar Sales Tax Act:
The case involved an assessee who did not pay the admitted tax for the last three quarters at the time of submitting the return, as required by section 14(2) of the Bihar Sales Tax Act. The Assistant Superintendent of Sales Tax issued a notice under section 13(2) and made an assessment to the best of judgment under section 13(3) since the assessee did not produce stock books or ledger accounts. The Deputy Commissioner of Sales Tax reduced the penalty and enhancement of turnover. The Board of Revenue set aside the assessment and penalty, citing lack of corroborative evidence. However, the High Court held that suspicion regarding the stock book and kata bahi did not justify rejecting the account books. The Court ruled that if authorities suspect unreliability or suppression of documents, assessment to the best of judgment is permissible under section 13(3).

Validity of penalty imposed for non-payment of admitted tax:
The penalty was initially imposed by the Assistant Superintendent of Sales Tax under section 12(3) instead of section 14(3a) of the Act. The High Court deemed this a clerical error, as the notice clearly indicated non-payment of admitted tax for the last three quarters. The penalty was justified under section 14(3a) since the assessee failed to pay the admitted tax as required by law. The Court rejected the argument that the penalty was invalid due to the incorrect section cited, as the assessee was aware of the situation and provided reasons for non-payment. The imposition of penalty by the Deputy Commissioner of Sales Tax under section 14(3a) was deemed legally valid and not vitiated by any illegality.

In conclusion, the High Court upheld the assessment to the best of judgment under section 13(3) and validated the penalty imposed for non-payment of admitted tax under section 14(3a) of the Bihar Sales Tax Act. The Court ruled in favor of the State of Bihar on both issues, holding the assessee liable for the costs of the reference and the hearing fee.