2011 (4) TMI 1243 - HC - VAT and Sales Tax

Summary

Issues:
Assessment based on estimate | Capacity of brick kiln | Maintenance of proper books of accounts | Rejection of books of accounts | Addition made by assessing officer | Legal errors in determining firing period | Excessive estimation of brick production | Request to set aside impugned order |

Assessment based on estimate:
The assessee, a proprietorship firm operating a brick kiln, faced discrepancies during a survey leading to the rejection of books of accounts by the assessing officer. The additions made on an estimate basis were upheld by the first appellate authority and the Tribunal. The counsel for the assessee argued that the impugned order was illegal and against the material on record, emphasizing that no firing was done during a specific period. Reference was made to a previous court ruling to support the argument that the firing period could not have been enhanced without evidence of the kiln running. The capacity of the brick kiln and the production estimates were disputed as being excessive and arbitrary. The request was made to set aside the impugned order.

Capacity of brick kiln and maintenance of proper books of accounts:
The standing counsel contended that the assessee had disclosed the capacity of the brick kiln during the survey, which was accepted by the lower authorities. It was highlighted that the assessee failed to maintain proper books of accounts, including records of coal consumption and labor registers. The assessing officer estimated the burning period based on earlier data due to the lack of proper documentation.

Rejection of books of accounts and legal errors in determining firing period:
The court observed that the assessee did not maintain books of accounts or labor registers to validate the capacity of the brick kiln. The rejection of books and subsequent additions were deemed appropriate in the absence of supporting documentation. The legal errors in determining the firing period were acknowledged, and it was noted that the assessing officer's actions were justified based on the available information.

Excessive estimation of brick production and request to set aside impugned order:
The counsel for the assessee argued against the excessive estimation of brick production and highlighted discrepancies in the lower authorities' findings. However, the court upheld the impugned order, citing established legal principles related to estimation as per previous judgments. No substantial question of law emerged from the case, leading to the dismissal of the revisions filed by the assessee.

Conclusion:
The revisions filed by the assessee were dismissed as lacking merit, and the impugned order was sustained. The court rejected the interim order passed earlier, affirming the decision based on the assessment made on an estimate and the failure to maintain proper books of accounts.