1988 (1) TMI 335 - HC - VAT and Sales Tax

Summary

Issues:
1. Rejection of account books and resort to best judgment assessment.
2. Burden of proof on the assessee regarding imported goods.

Analysis:
1. The first issue in this sales tax revision pertains to the rejection of the account books of the assessee and the subsequent resort to best judgment assessment for the assessment year 1981-82. The assessee, a hardware and machinery parts dealer, declared a gross turnover of Rs. 4,04,972.42 but did not admit any taxable turnover. The assessment was initially made on a taxable turnover of Rs. 1,50,000, which was later reduced to Rs. 1,00,000 by the Sales Tax Tribunal. The primary contention raised was whether there was sufficient material to reject the account version of the assessee and opt for best judgment assessment. The account books were found defective and not maintained in the regular course of business during various surveys conducted at the business premises. Numerous discrepancies were noted, such as incomplete sales copies, missing serial numbers in bill books, unverified sales and purchases, and inadequate record-keeping practices. The Sales Tax Tribunal concluded that the declared version was rightly rejected due to the substantial irregularities found in the account books. The court upheld the Tribunal's decision, emphasizing that accurate accounts are essential for determining taxable turnover under Section 12(1) of the Act. Therefore, the rejection of the account books and the subsequent best judgment assessment were deemed appropriate based on the evidence presented.

2. The second issue raised in the revision concerns the burden of proof on the assessee regarding imported goods. The assessee contended that all goods were locally purchased, and there was no evidence to establish the importation of goods, thereby claiming exemption from tax liability. However, the Sales Tax Tribunal, citing a precedent, rejected this argument. Referring to the decision in Ambala Tobacco House v. Commissioner of Sales Tax, U.P., it was reasoned that the assessee's practice of keeping transactions of non-taxable goods outside the books implied purchases from outside Uttar Pradesh. The court concurred with this reasoning, indicating that the omission of transactions from the books suggested purchases made outside the state. Consequently, the second contention regarding the absence of imported goods and tax liability exemption was dismissed. The revision was deemed devoid of merit and subsequently dismissed with costs, upholding the Sales Tax Tribunal's decision on both issues.