1988 (3) TMI 445 - HC - VAT and Sales Tax

Summary

Issues:
Sales Tax revision under Section 11 of the U. P. Sales Tax Act - Assessment of taxable turnover based on best judgment - Discrepancy in operational period of brick kiln - Disagreement on average selling rate per thousand bricks - Challenge to determination of gross production of bricks.

Analysis:
The judgment pertains to a Sales Tax revision under Section 11 of the U. P. Sales Tax Act, where the assessment of taxable turnover based on best judgment is in question. The case involves M/s. Jai Hind Brick Works, Dilari, dealing with the manufacture and sale of bricks in the assessment year 1978-79. The dispute arises from the operational period of the brick kiln, with the assessee claiming a different start date compared to the Assessing Authority's determination. Additionally, there is a discrepancy in the average selling rate per thousand bricks, as the Assessing Authority rejects the rate provided by the assessee, leading to the adoption of a higher rate for calculating the taxable turnover.

Upon review, the judge finds that the findings regarding the average selling rate and the operational period are based on evidence and do not warrant interference. However, concerning the gross production of bricks, the judge notes substance in the assessee's argument. Referring to a previous decision by the Tribunal in the assessee's case for the assessment year 1977-78, where a production period of 35 days for one round of bricks was considered reasonable, the judge questions the inconsistency in adopting a 25-day period for the current assessment year. As there were no changes in the kiln's capacity or dimensions, the judge deems it necessary for the Sales Tax Tribunal to reevaluate the determination of brick production, considering past orders and relevant material.

The judgment concludes by directing the Tribunal to reconsider the issue of brick production, restoring the assessee's appeal to its original number for a fresh decision. The revision is partially allowed, with no costs imposed. The decision highlights the importance of consistency and proper evaluation in determining taxable turnover, especially concerning production estimates in the absence of significant changes in operational factors.