1976 (2) TMI 158 - HC - VAT and Sales Tax

Summary

Issues:
Rejection of account books and assessment at a specific amount based on survey findings.

Analysis:
The judgment pertains to a dispute regarding the rejection of an assessee's account books and the subsequent assessment at a specific amount. The Additional Judge (Revisions), Sales Tax, referred the question of whether there was sufficient material for the rejection of the assessee's account books and assessing it at Rs. 15,000. The assessee was engaged in the non-ferrous metal business during the relevant year and declared a turnover of Rs. 50,952. Two surveys were conducted at the assessee's premises during the assessment year, where the account books were not presented. The Assistant Sales Tax Officer accepted the turnover for non-ferrous metal but added Rs. 15,000 for brassware sales in Uttar Pradesh due to the non-disclosure of account books during the surveys. On appeal, the Assistant Commissioner held that the rejection of account books solely based on non-disclosure was incorrect, and the previous year's business activity in brasswares was not a valid reason for addition to the turnover. However, the Judge (Revisions), Sales Tax, allowed the revision partially, considering the failure to show account books as a relevant factor and fixed the turnover for brasswares at Rs. 8,000.

The counsel contended that the revising authority's reliance on irrelevant facts and circumstances led to an unsustainable decision. The inspection of a dealer's premises is governed by section 13 of the Act, empowering surveying officers to inspect account books. Non-cooperation with the surveying officer can lead to penal action, but mere non-cooperation does not render the account books unreliable, especially if they were accepted for one aspect of the business. Rejecting account books based on past business activities alone is unjustified as each assessment year is distinct, and continuity cannot be presumed. The additions to the turnover were made assuming the continuity of old business without any objective evidence for the current assessment year, which was lacking in this case.

The Court found no legal or relevant material to support the rejection of the assessee's account books. The judgment ruled against the department and in favor of the assessee, concluding that there was insufficient basis for the rejection. The question was answered in the negative, and the assessee was awarded costs amounting to Rs. 100.