1984 (3) TMI 366 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the addition of Rs. 20,000 in the gross turnover is warranted under law based on the alleged sale of Rs. 6,200 noted in the exercise books?

Analysis:
The case involves a registered dealer dealing in arms and ammunitions whose business premises were inspected, revealing discrepancies in the sales transactions recorded in the books. The Assessing Authority made an addition of Rs. 20,000 to the gross turnover, which was upheld by the Deputy Excise and Taxation Commissioner and the Sales Tax Tribunal. The dealer contended that the addition was arbitrary as the concealed sales were only up to Rs. 6,200. The dealer relied on previous judgments emphasizing that a best judgment assessment should be based on reasonable objective data and not arbitrary. On the other hand, the Revenue argued citing a Supreme Court judgment that the assessing authority can estimate the turnover based on rational grounds even if there is no concrete proof. The High Court noted that the suppressed turnover of Rs. 6,200 provided a relevant basis for estimating the turnover, which was within the Assessing Authority's domain. The court upheld the addition of Rs. 20,000 to the gross turnover, emphasizing that the Assessing Authority's conclusion was not biased, irrational, vindictive, or capricious, meeting the standards set by the Supreme Court.

In conclusion, the High Court answered the question in favor of the Revenue and against the assessee, upholding the addition of Rs. 20,000 in the gross turnover. The court found that the Assessing Authority's estimate was based on a relevant basis and satisfied the standards set by the Supreme Court. The judgment emphasizes the importance of a rational and non-arbitrary best judgment assessment by the assessing authority, even in the absence of concrete proof, as long as the estimate is based on reasonable grounds.