1993 (1) TMI 276 - HC - VAT and Sales Tax

Summary

Issues:
Assessment under the U.P. Sales Tax Act and Central Sales Tax Act for the year 1979-80, rejection of returns, determination of turnover on best judgment, deletion of addition made under the Central Act, justification for the fixation of turnover, consideration of inter-State sales, reasonableness of assessment, remand for fresh assessment, errors in the Tribunal's order, legal principles for estimating turnover, jurisdiction in making assessments.

Analysis:
The case involves a revision under section 11(1) of the U.P. Sales Tax Act, 1948, concerning an assessment made under the Central Sales Tax Act for the year 1979-80. The dispute arose when the Sales Tax Officer rejected the returns filed by the assessee under both the U.P. Sales Tax Act and the Central Sales Tax Act, citing reasons such as the failure to produce essential documents like cash book and manufacturing registers. The Officer then proceeded to determine the turnover on best judgment, resulting in a consolidated taxable turnover estimation. The assessee appealed against these assessments, leading to a common order by the appellate authority. The State Act's assessment was set aside for fresh assessment, while the addition made under the Central Act was deleted. However, the Revenue appealed against the deletion, which was allowed by the Sales Tax Appellate Tribunal, prompting the assessee to file a revision.

Upon review, the High Court found that the Tribunal's order was flawed and required fresh consideration. The remand for the State Act assessment had not led to any fresh assessment, and the Tribunal had not adequately considered the absence of material regarding inter-State sales. The Court emphasized the need for a fair estimate of turnover based on evidence, not mere suspicion, as highlighted in legal precedents. The Tribunal's approach in restoring the assessment without proper justification and consideration of the appellate authority's findings was deemed erroneous. The Court set aside the Tribunal's order and remanded the matter back for a reevaluation in line with the legal principles discussed.

In conclusion, the High Court allowed the revision, highlighting the importance of a judicious estimation of turnover based on relevant evidence and legal principles. The Court emphasized the need for a fair and proper assessment, directing the Tribunal to reconsider the matter in accordance with the observations made in the judgment. The revision was allowed with no order as to costs, ultimately setting aside the Tribunal's order and remanding the case for a fresh decision.