1979 (7) TMI 227 - HC - VAT and Sales Tax

Summary

Issues:
1. Rejection of account books by the assessing authority.
2. Justification of taxable turnover fixed by the Additional Judge (Revisions).

Analysis:
The case involved a dispute regarding the rejection of the assessee's account books and the determination of the taxable turnover for the year 1970-71. The Additional Judge (Revisions) referred questions of law under section 11(1) of the U.P. Sales Tax Act. The assessing authority rejected the account books based on the inference of tax evasion due to discrepancies in the records of the previous year and the non-inclusion of certain sales in the current year. The appellate authority and the Additional Judge (Revisions) upheld the rejection of the account books based on these grounds.

Regarding the rejection of the account books for the previous year and a survey conducted in a subsequent year, the court emphasized that each assessment year should be considered independently. The rejection of account books from other years does not automatically justify rejection for the current year. The court distinguished previous cases where rejection of account books in surrounding years was considered valid grounds for rejection, stating that in the present case, there was no evidence of rejection in the succeeding year.

The court highlighted that the rejection of account books should be based on concrete evidence of discrepancies or defects in the records. In this case, since the account books were found to be maintained in detail without any discrepancies, the rejection was deemed unjustified and based on assumptions rather than material evidence. The Additional Judge (Revisions) was criticized for not providing substantial grounds for the rejection of the account books, leading to the decision that the rejection was unwarranted.

In conclusion, the court allowed the revision, directing the Judge (Revisions) to take appropriate action under section 11(8) of the Sales Tax Act. The assessee was awarded costs, and the petition was allowed, indicating a favorable outcome for the assessee in challenging the rejection of their account books and the determination of taxable turnover.