2008 (7) TMI 925 - HC - VAT and Sales Tax

Whether the Tribunal is legally justified in denying the turnover of form C for ₹ 85,568.75 which was said before the first appellate authority? Held that - The assessing authority as also the Tribunal have considered the material on record in arriving at the finding of not accepting the account books and making an estimation of turnover which are pure finding of fact not warranting any interference in revisional jurisdiction. The findings recorded by the assessing authority and the Tribunal are not without basis and, therefore, do not warrant any interference. Revision dismissed.

Summary

Issues Involved:
1. Legality of rejection of books of account.
2. Basis for rejection of books of account.
3. Estimation of taxable turnover under the State Act.
4. Estimation of taxable turnover under the Central Act.
5. Denial of turnover of form C for Rs. 85,568.75.

Detailed Analysis:

1. Legality of Rejection of Books of Account:
The Tribunal sustained the rejection of the dealer's books of account under both the State and Central Acts. The assessing authority found discrepancies in the dealer's returns and account books, leading to a show-cause notice. The dealer's failure to provide satisfactory explanations for these discrepancies justified the rejection of the books. The Tribunal's decision was based on material evidence, including a survey report and the dealer's non-compliance with show-cause notices.

2. Basis for Rejection of Books of Account:
The rejection was based on multiple grounds:
- Discrepancy of Rs. 85,567 in returns and account books.
- Decline in turnover from the previous year, attributed to riots and communal violence.
- Non-production of account books during a survey.
- Seizure of documents indicating unrecorded transactions with a transporter.
- Non-maintenance of account books as required under section 12(2) of the Act.

The Tribunal found that the dealer's explanations were insufficient, particularly regarding the seized goods receipts and the failure to file revised returns for inter-State sales. The dealer's avoidance of participation in the inquiry further supported the rejection.

3. Estimation of Taxable Turnover under the State Act:
The Tribunal upheld the estimation of taxable turnover at Rs. 30,00,000. The assessing authority's estimate was based on the discrepancies and the dealer's failure to maintain proper records. The Tribunal found no infirmity in this estimation, as it was supported by material evidence and the dealer's non-compliance with statutory requirements.

4. Estimation of Taxable Turnover under the Central Act:
The Tribunal also upheld the estimation of taxable turnover at Rs. 2 lakhs under the Central Act. The dealer admitted to a Central sale but failed to disclose it in the returns or file revised returns. This omission justified the estimation and the rejection of the dealer's books.

5. Denial of Turnover of Form C for Rs. 85,568.75:
The Tribunal denied the turnover of form C for Rs. 85,568.75, which the dealer claimed should have been considered. The dealer's failure to disclose this turnover in the returns or file revised returns, despite admitting to the transaction, supported the Tribunal's decision. The assessing authority and the Tribunal found that the dealer intended to evade tax, justifying the denial.

Conclusion:
The High Court dismissed the revisions, finding no infirmity in the Tribunal's order. The rejection of books of account, estimation of taxable turnover, and denial of form C turnover were all based on material evidence and justified by the dealer's non-compliance and discrepancies in records. The findings were pure findings of fact, not warranting interference in revisional jurisdiction.