1986 (11) TMI 357 - HC - VAT and Sales Tax

Summary

Issues Involved:
Reference under section 24(1) of the Orissa Sales Tax Act regarding the rejection of accounts based on suppressions found on specific dates and the subsequent enhancement of turnover for the assessment year 1969-70.

Summary:

Issue 1: Rejection of Accounts based on Suppressions
The dealer, engaged in the sale of wheat and wheat products, was assessed under section 12(4) of the Act to the best judgment of the assessing officer for the assessment year 1969-70. The assessing officer enhanced the turnover due to suppressions found on specific dates not reflected in the dealer's account books maintained on a Diwali year basis. The Tribunal, however, annulled the enhancement, questioning the legality of rejecting the accounts based on the dates mentioned.

Issue 2: Legal Nexus for Best Judgment Assessment
The Tribunal considered the slip with dates in 1970-71, not reflected in the account books for the year 1969-70, and concluded that a future action cannot form a nexus for best judgment assessment of a previous period. It was deemed unjustified for the assessing authority to rely on suppressions from a subsequent year to enhance turnover for the previous assessment year.

In conclusion, the Tribunal's decision was upheld, stating that the books of accounts maintained by the assessee on a Diwali year basis should not have been rejected for suppressions found on specific dates, and thus, the enhancement made for the assessment year 1969-70 was rightfully annulled. The reference was answered in favor of the assessee, with no costs incurred.