1973 (4) TMI 89 - HC - VAT and Sales Tax

Summary

Issues:
1. Rejection of books of account based on low profit margin and lack of details in cash bills.
2. Assessment of turnover and rejection of accounts by Sales Tax Officer.
3. Appeal process and consideration of affidavits as additional evidence before the Tribunal.

Issue 1: Rejection of books of account based on low profit margin and lack of details in cash bills.
The Sales Tax Officer did not accept the accounts of the assessee for the assessment year 1963-64 due to various reasons, including the low profit margin, absence of proper goods ledger, and lack of details in the cash bills. The assessing officer found discrepancies in the accounts, such as low gross profits, unverifiable sales due to missing purchaser details in cash bills, and evidence of suppression of sales. The appellate authority agreed with the assessing officer's decision to reject the books but reduced the estimate. The High Court emphasized that rejection of accounts depends on the facts of the case, and if low profits are linked to suppression of transactions, rejecting the books is justified.

Issue 2: Assessment of turnover and rejection of accounts by Sales Tax Officer.
The assessee, a firm dealing in various goods, had its turnover enhanced by the Sales Tax Officer after rejecting its accounts for the assessment year 1963-64. The officer raised concerns about the maintenance of accounts, low profit margins, unverifiable sales due to missing details in cash bills, and evidence of suppressed sales. The Tribunal affirmed the assessment as modified by the first appellate authority, and an application under section 24(1) of the Act was rejected for not raising any legal questions.

Issue 3: Appeal process and consideration of affidavits as additional evidence before the Tribunal.
During the appeal process, the assessee filed five affidavits before the Tribunal, but the judgment did not reference or consider them. The High Court analyzed the legal provisions regarding the admissibility of additional evidence before the Tribunal. Rule 61 of the Sales Tax Rules provided limitations on adducing fresh evidence, requiring parties to satisfy specific conditions for its admission. Since the affidavits were not considered by the Tribunal and were not raised as fresh evidence under the rules, the High Court held that the Tribunal was not obligated to address or provide reasons for not considering the affidavits. Consequently, the High Court declined to answer the questions related to the affidavits and directed each party to bear its own costs.