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1996 (3) TMI 514 - HC - VAT and Sales Tax
Issues involved: Assessment of turnover based on defects in maintaining accounts.
Summary: 1. The assessee, engaged in the business of gold and silver ornaments, filed a return for the assessment year 1985-86. The assessing authority proposed to reject the return and accounts due to various grounds including lack of proper maintenance of manufacturing accounts and missing purchase bills. 2. The assessee responded, explaining the defects and asserting the correctness and completeness of the accounts. They argued that the registers were maintained as per Central Excise Acts and Rules, and payments were recorded in the day book. 3. Despite the assessee's explanations and production of certain registers, the assessing authority rejected the accounts and estimated the turnover, leading to a higher taxable turnover than the returned amount. 4. The assessee appealed to the Additional Appellate Assistant Commissioner, emphasizing the maintenance and production of registers. However, the appellate authority upheld the rejection of accounts without verifying the statements made by the assessee. 5. The matter was further appealed to the Kerala Sales Tax Appellate Tribunal, which confirmed the rejection of accounts without detailed discussion, citing the gravity of defects as the basis for the decision. 6. In the High Court, the Senior Counsel argued that the defects were general in nature, with no specific instances of suppression detected. They highlighted a previous year's tribunal decision in favor of the assessee. 7. The Government Pleader contended that the defects indicated suppression, justifying the rejection of accounts and the addition to the turnover. 8. After considering the submissions, the High Court found that most defects were general or technical, with no evidence of suppression in purchases or sales. The Court criticized the authorities for not objectively considering the objections raised by the assessee. 9. Consequently, the High Court allowed the tax revision case, quashing the previous orders and directing the assessing authority to accept the return and accounts for proper assessment.
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