1998 (3) TMI 657 - HC - VAT and Sales Tax

Summary

Issues:
1. Rejection of account books under U.P. Sales Tax Act and Central Sales Tax Act.
2. Maintenance of stock registers and compliance with section 12(2) of the U.P. Sales Tax Act.
3. Discrepancy in stock position and explanation provided by the assessee.
4. Treatment of inter-State sales under the Central Sales Tax Act.
5. Findings of fact by the Sales Tax Tribunal and justification for accepting the disclosed book version.

Detailed Analysis:
1. The judgment involves two connected sales tax revisions challenging an order by the Sales Tax Tribunal for the assessment year 1987-88. The first revision pertains to the U.P. Sales Tax Act, while the second relates to the Central Sales Tax Act. Both revisions arise from common facts, making it convenient to address them together.

2. The assessee, engaged in the manufacture and sale of cotton hosiery, disclosed a gross turnover for the year. The assessing authority rejected the book version and determined the net turnover under both U.P. Sales Tax Act and Central Sales Tax Act. The assessee appealed, and the Sales Tax Tribunal allowed the appeals, accepting the book version. The Revenue filed revisions disputing the Tribunal's order.

3. The Tribunal found that the assessee maintained stock registers, production registers, sales registers, and other necessary records as required by section 12(2) of the U.P. Sales Tax Act. The Tribunal concluded that the accounts were maintained properly, allowing verification of manufacturing activities, purchases, and sales. The assessing officer's rejection of account books was deemed unjustified.

4. A discrepancy in the stock position was noted during a survey, where physical verification revealed a difference from the recorded stock. However, the assessee provided a satisfactory explanation for the variance, which the Tribunal accepted. The Tribunal scrutinized the details from the stock register to validate the explanation, finding no grounds to uphold the rejection of account books.

5. Regarding inter-State sales under the Central Sales Tax Act, a paper known as Parcha No. 13 was scrutinized. The Tribunal accepted the assessee's explanation for the entries in the parcha, leading to the deletion of the disputed addition in turnover. The Tribunal found no evidence to suggest that the sales made by the Delhi branch were not from stock transferred by the head office. The Revenue failed to provide material demonstrating a contract for goods moved to another State.

6. The Tribunal's findings were based on a thorough evaluation of evidence and considerations of conflicting contentions. The order highlighted the inadequacies in the assessing authority's conclusions, justifying the acceptance of the disclosed book version. The Tribunal's decision was deemed justified, with no legal questions arising from the order.

7. Ultimately, both revisions were found to lack merit and were rejected by the High Court, upholding the Sales Tax Tribunal's decision. The petitions were dismissed, affirming the Tribunal's order regarding the assessment year in question.