1978 (9) TMI 166 - HC - VAT and Sales Tax

Summary

Issues involved:
The issues involved in this case are:
1. Rejection of the assessee's accounts based on material.
2. Assessment of turnover based on material.

Rejection of the assessee's accounts:
During the assessment year 1964-65, a survey revealed that the kachchi rokar was incomplete and not updated for 30th and 31st December, 1964. Although a difference was found in the cash amount, the Sales Tax Officer accepted the explanation provided by the assessee regarding the discrepancy. However, the accounts were rejected based on the fact that the returned income of the assessee was enhanced by the Income-tax Officer, leading to an estimated turnover increase of 12.5 percent. The appellate authority acknowledged that the account books were maintained properly but upheld the rejection due to discrepancies in categorizing sales and incomplete bookkeeping during the relevant year.

Assessment of turnover:
The revising authority, while considering the turnover estimation for the assessment year 1964-65, found that the account books were not maintained in the regular course of business as they were not updated. Additionally, the authority relied on the low profits disclosed by the dealer, which was not accepted by the income-tax department. However, the court noted that low profit alone is not sufficient grounds for rejecting accounts. It emphasized that accounts must be regularly maintained to be relied upon. The turnover estimation was based on a profit rate of 12.5 percent, similar to the one applied by the Income-tax Officer, which the assessee did not challenge. Therefore, the Sales Tax Officer had sufficient material to estimate the turnover.

In conclusion, both questions regarding the rejection of accounts and turnover assessment for the year 1964-65 were answered in favor of the department, allowing them to recover costs amounting to Rs. 200.