1977 (8) TMI 148 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge against rejection of books of account by assessing authority.
2. Grievance regarding the arbitrary and excessive turnovers estimated by the Additional Judge (Revisions).

Analysis:
The petitioner, engaged in the business of manufacturing and selling bricks, challenged the rejection of his books of account by the assessing authority for the assessment years 1966-67 and 1967-68. The Additional Judge (Revisions) upheld the rejection but reduced the turnovers estimated for those years, leading to a reduction in the tax assessed. The petitioner's counsel did not contest the rejection of books but argued that the turnovers estimated were arbitrary, capricious, and lacked a basis in material.

The Court referred to the principles laid down by the Privy Council in Commissioner of Income-tax v. Badridas Ramrai Shop, emphasizing that assessments made to the best judgment must be fair and based on honest estimates. The assessing authority had considered the capacity of the petitioner's kiln and estimated the turnovers based on the number of rounds the kiln operated. The Additional Judge (Revisions) used the assumption of four rounds per season, which was considered reasonable and not vindictive. The Court found that the estimates were not arbitrary but based on the best available material, even though some guesswork was involved.

The petitioner argued that the number of rounds used in earlier years should have been the basis for estimating turnovers for the relevant assessment years. However, the Court held that there was no presumption that the number of rounds remained the same in the years in question. Therefore, the Additional Judge (Revisions) was justified in using the four rounds per season as the basis for estimation, considering the circumstances and available information.

Ultimately, the Court found no grounds to interfere with the order of the Additional Judge (Revisions) and dismissed the petition. The parties were directed to bear their own costs in the circumstances of the case, concluding the judgment.