1984 (6) TMI 203 - HC - VAT and Sales Tax

Summary

Issues: Challenge to addition of suppressed turnover to disclosed turnover for sales tax assessment.

Analysis:
The petitioner, a dealer in rubber, challenged the addition of an amount to the disclosed turnover by the assessing authority due to detected suppression. The petitioner claimed that the addition of twice the suppressed turnover to the disclosed turnover was unwarranted. The counsel for the petitioner relied on legal precedents to support the argument that such additions were arbitrary and not based on factual or legal grounds.

The first legal precedent cited was a case where the Sales Tax Officer found suppression of turnover based on an inspection of the assessee's shop. However, the Court observed that there was a lack of material to support the conclusion of suppression reached by the taxing authorities. This case was distinguished from the current case due to factual differences.

Another legal precedent highlighted involved the estimation of turnover by multiplying suppressed transactions with the assumption of similar transactions being suppressed on all days. The Court deemed this method arbitrary and not applicable to the current case, where such multiplication was not involved.

The final legal precedent discussed a case where additional transactions were discovered during a surprise inspection, leading to reassessment of turnover. The Court noted that this case was also not relevant to the present situation.

The Court emphasized that once suppression is proven or admitted, the taxing authority has the right to add reasonable amounts to the disclosed turnover. In this case, where suppression amounting to Rs. 1,79,614 was detected, the addition of Rs. 3,59,230 (twice the suppressed turnover) was deemed reasonable and not excessive. Consequently, the revision was dismissed, and no costs were awarded.

Upon the oral request for leave to appeal to the Supreme Court, the Court declined, stating that no substantial question of law of general importance necessitated Supreme Court intervention. The judgment was to be provided to the petitioner's counsel on usual terms if requested.