1989 (2) TMI 374 - HC - VAT and Sales Tax

Summary

Issues:
1. Rejection of account books by the assessing authority.
2. Ownership of a diary found during a survey.
3. Liability of the assessee under the Central Sales Tax Act for the assessment year 1976-77.

Detailed Analysis:

1. The assessing authority rejected the account books of the assessee for not maintaining a manufacturing account and based on the discovery of a diary during a survey. The High Court noted that the assessee operated in brass materials, stainless steel goods, and steel scraps, getting goods manufactured through contractors without maintaining a manufacturing account. The court highlighted that the department accepted the account books in preceding and succeeding years without any defects. Citing precedent, the court found no basis for rejecting the account books solely on the absence of a manufacturing account, overturning the Sales Tax Tribunal's decision.

2. The diary found during a survey was claimed by the assessee to belong to an agent, Sri Rajendra Kochar, who worked for multiple parties including the assessee. The authorities inferred that the diary belonged to the assessee, leading to a dispute. The High Court analyzed the entries in the diary, noting debits made in the name of various parties, including the assessee. The court found inconsistencies in the Tribunal's reasoning and concluded that the diary likely belonged to Sri Rajendra Kochar, necessitating further examination of evidence by the Sales Tax Tribunal to determine ownership conclusively.

3. The issue of the assessee's liability under the Central Sales Tax Act for the assessment year 1976-77 arose from discrepancies in disclosed turnover leading to a best judgment assessment. The Assistant Commissioner and Sales Tax Tribunal upheld the rejection of account books, which was challenged in the High Court. The High Court's decision to remand the case to the Sales Tax Tribunal for a fresh hearing was based on the ownership dispute of the diary, emphasizing the need for a thorough examination of evidence to determine liability accurately. The revision was allowed, costs were imposed, and the Sales Tax Tribunal was directed to rehear the appeals considering the observations made.