1983 (12) TMI 264 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of taxable turnover, rejection of account books, legal question regarding nonproduction of account books during survey.

Analysis:
The case involved the assessment of taxable turnover for the year 1978-79 by the assessing authority, where the dealer disclosed a turnover of Rs. 45,772.59, but the authority determined it at Rs. 1,72,088, assessing tax at Rs. 12,700 based on best judgment assessment. The dealer appealed, and the Assistant Commissioner partly allowed the appeal, reducing the turnover to Rs. 1,18,180. The dealer then filed a second appeal, which was allowed by the Sales Tax Tribunal, accepting the disclosed turnover and ordering a refund of excess tax paid. The Commissioner filed a revision challenging this decision under section 11(1) of the U.P. Sales Tax Act.

The key legal question was whether account books not produced for inspection during a survey could be rejected and if an adverse inference could be drawn against the dealer for nonproduction. The Tribunal held that account books could not be rejected solely for nonproduction during the survey, citing precedents and emphasizing careful scrutiny when subsequently produced. The Tribunal's decision was based on the lack of evidence of manipulation in the stock register and the legal principle that noncooperation during a survey does not automatically render account books unreliable.

The High Court further discussed relevant case law, emphasizing that the acceptance or rejection of account books is a factual determination within the authority's jurisdiction. The Court reiterated that unless a finding is without evidence or contrary to evidence, it does not raise a question of law for revision. The Court highlighted that the sufficiency of evidence and the correctness of inferences drawn from it are factual matters not subject to revision unless unsupported by evidence or based on inadmissible evidence.

Ultimately, the Court found that the Tribunal's decision to accept the dealer's account books was based on a thorough consideration of facts and material on record, without legal error. As such, the Court dismissed the revision, stating that the case was concluded by factual findings and did not involve any legal question warranting interference under section 11(1) of the Act. The Court directed each party to bear their own costs in the circumstances of the case.