1971 (3) TMI 99 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment based on discrepancies in stock valuation.
2. Challenge to penalty imposition without finding of wilful non-disclosure of assessable turnover.

Analysis:
1. The petitioner, a dealer in automobile parts, was assessed for the year 1963-64 based on discrepancies in stock valuation. The Joint Commercial Tax Officer estimated the closing stock value at Rs. 7,43,414.71, but the assessing authority later revised it to Rs. 1,90,929.03 after re-scrutiny. The assessing authority calculated the undeclared stock value by deducting disclosed stocks, applying a profit margin, and apportioning sales into first and second categories. The petitioner contended that the revised valuation was arbitrary, but the court found the assessing authority's method reasonable and not arbitrary. The court emphasized that interference is warranted only if the finding is unreasonable or perverse, which was not the case here.

2. The second issue raised was regarding the imposition of a penalty without a finding of wilful non-disclosure of assessable turnover. The court noted that Section 16(2) of the Madras General Sales Tax Act requires the assessing authority to be satisfied about wilful non-disclosure before levying a penalty. In this case, the court found that the assessing authority did not explicitly state that the undisclosed stock was wilfully not disclosed, as required by law. Referring to a previous Division Bench decision, the court held that the penalty imposition without such a finding was improper. Therefore, the court quashed the penalty imposition but upheld the rest of the assessment order. The writ petition was allowed in part, with no costs awarded.