1981 (6) TMI 119 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of the best judgment assessment made by the assessing authority.
2. Treatment of the entire assumed gross turnover as taxable turnover.
3. Adequacy of notice and procedural fairness in finalizing the assessment.

Analysis:
1. The revision petition challenged the best judgment assessment made by the assessing authority under the Sales Tax Act, 1957. The petitioner contended that the assessment of Rs. 1,00,000 as taxable turnover, as opposed to the previous year's turnover of Rs. 3,800, was arbitrary. However, the court found that the best judgment assessment was not arbitrary as the figures from the filed forms indicated a turnover close to the assessed amount, justifying the assessment. The court held that the absence of reliance on the previous year's turnover did not invalidate the assessment.

2. The petitioner argued that the entire gross turnover should not have been considered as taxable turnover, especially as a significant portion represented dealings as a second dealer. The court emphasized that the burden of proof to show that specific transactions were not taxable rested on the assessee, as per section 6-A of the Act. Since the petitioner failed to provide evidence to support this claim at any stage of the assessment process, the court upheld the assessing authority's decision to treat the entire turnover as taxable.

3. The petitioner raised concerns regarding the procedural fairness of the assessment process, specifically highlighting an assurance from the assessing authority about issuing fresh notices. However, the court noted that this contention was not strongly pursued by the petitioner during the appeal process. Consequently, the court found no merit in this argument and dismissed the petition at the admission stage. The High Court Government Pleader was given permission to file a memo of appearance if not already done within two weeks.

In conclusion, the High Court of Karnataka upheld the best judgment assessment, rejected the challenge to the treatment of the entire gross turnover as taxable, and found no procedural irregularities in finalizing the assessment, ultimately dismissing the revision petition.