1989 (5) TMI 304 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether non-maintenance of stock register justifies rejection of account books for best judgment assessment.
2. Whether the burden of proof was wrongly placed on the department by Deputy Commissioner (Appeals).
3. Whether production of stock register is necessary for corroborative material.

Analysis:
1. The primary issue in this case was whether the non-maintenance of a stock register justifies the rejection of account books for a best judgment assessment. The Deputy Commissioner (Appeals) found that the assessing authority's decision to assess the tax to the best of judgment was not reasonable, as there was no reasonable basis for resorting to this mode of assessment. The Tribunal upheld the Deputy Commissioner (Appeals) decision, stating that there was no defect in accepting the explanations given by the assessee, which had been rejected by the assessing authority. The court held that the mere non-maintenance of a stock register is not by itself sufficient to reject the account books and make a best judgment assessment. It emphasized that compliance with the statutory provisions could be shown through other account books maintained by the assessee, and the decision should be based on whether the account books satisfy the requirement, not solely on the absence of a stock register.

2. The second issue raised was whether the burden of proof was wrongly placed on the department by the Deputy Commissioner (Appeals). The department contended that the Deputy Commissioner (Appeals) and the Tribunal wrongly placed the burden on the department to prove that the account books were wrong. However, the court found that the Deputy Commissioner (Appeals) did not place an extra burden on the department but merely referred to circumstances indicating the inaction of departmental authorities, leading to the view that the explanation provided by the assessee was plausible and acceptable. Therefore, the court concluded that the burden of proof was not wrongly placed on the department.

3. The final issue addressed was whether the production of the stock register is necessary for corroborative material. The department argued that the production of the stock register is necessary to provide corroborative material, even if its non-maintenance is not a fatal defect. However, the court reiterated that corroborative material is required to strengthen the probative value of the substantive material already produced. In this case, the finding of fact was in favor of the assessee even without the corroborative material, as the stock register was not withheld from the departmental authority to justify adverse inferences.

In conclusion, the court dismissed the revision, stating that there was no ground for interference within the scope of revision. The decision was based on the findings of fact recorded by the Deputy Commissioner (Appeals) that the assessee's explanation was plausible and acceptable, and no interference was warranted after the Tribunal's refusal to interfere with the final departmental authority's decision.