1970 (2) TMI 124 - HC - VAT and Sales Tax

Summary

Issues:
- Rejection of account books due to discovery of anamath slips
- Assessment of escaped turnover under best judgment
- Dispute over addition of rupees six lakhs to disclosed turnover
- Argument of honesty and intention to avoid heavy penalty
- Contention of regularity in maintenance of irregular accounts
- Consideration of suppressed turnover and motive to avoid tax
- Confirmation of assessment by Appellate Tribunal

Analysis:
The petitioner, a dealer in grains and pulses, faced rejection of his account books by the revenue authorities due to the discovery of anamath slips alongside his regular books of account. The revenue assessed the escaped turnover under their best judgment, adding about rupees six lakhs to the disclosed turnover for the year 1962-63. Despite the petitioner's attempts to demonstrate the quantum of alleged suppression and argue his honesty, the Appellate Tribunal confirmed the assessment, emphasizing the petitioner's motive to avoid tax.

The petitioner contended that his conduct reflected honesty rather than an intention to suppress and avoid tax. He argued that the addition of rupees six lakhs to the disclosed turnover was unreasonable, considering his efforts to provide all available materials to avoid a heavy penalty. However, the Tribunal found that the petitioner had indeed suppressed material and attempted to evade tax, as evidenced by the discovery of anamath slips revealing nearly rupees two lakhs of escaped turnover.

The Tribunal rejected the petitioner's explanation that the regular maintenance of irregular accounts should be considered an extenuating circumstance. It emphasized that such regularity in accounts related to suppressed dealings indicated a designed motive to avoid tax, warranting severe treatment. The Tribunal upheld the addition of rupees six lakhs, considering the petitioner's conduct and subsequent turnovers disclosed in the following years as indicators of wanton suppression to evade taxation.

Ultimately, the High Court dismissed the petition, stating that no other question of law arose and refusing to interfere with the Appellate Tribunal's order. The judgment highlights the importance of maintaining accurate and transparent accounts to prevent tax evasion and the severe consequences for deliberate attempts to avoid taxation.