1995 (9) TMI 355 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of taxable turnover for the year 1978-79 based on estimates and lack of proper accounts maintenance.

Analysis:
The assessee reported a turnover of Rs. 22,050 for the assessment year 1978-79, but the assessing officer determined the taxable turnover at Rs. 2,68,521 based on various materials. The Appellate Assistant Commissioner later redetermined the taxable turnover at Rs. 1,03,964, and the Appellate Tribunal further adjusted it to rupees two lakhs. The assessee challenged this before the High Court, arguing that the Tribunal's estimate was excessive. The department, however, supported the Tribunal's decision, citing the assessee's failure to maintain proper accounts and explain the absence of turnover for some months during the assessment year.

The High Court noted that the assessee claimed the turnover of Rs. 22,050 was only for April 1978, while the department found sales of cashewnuts amounting to Rs. 70,830.05 from bank records. After deducting 15% gross profit, the purchase value of cashew kernel was calculated at Rs. 67,457. Adding this to the reported turnover, the total reached Rs. 89,507, which was then multiplied by three to arrive at the taxable turnover of Rs. 2,68,521. However, the Court found multiplying by three to be excessive and decided to multiply by two instead, resulting in a revised taxable turnover of Rs. 1,50,000, lower than the Tribunal's determination.

Despite the assessee's failure to produce accounts despite repeated notices, the Court considered the arguments from both sides and concluded that the initial estimate was on the high side. Acknowledging the seasonal nature of the business, the Court found multiplying by two more appropriate, leading to the revision of the taxable turnover. Consequently, the tax case revision filed by the assessee was allowed to the extent of revising the taxable turnover to Rs. 1,50,000.