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2014 (3) TMI 241 - HC - VAT and Sales TaxValidity of Assessment Rejection of accounts - Estimation of Turnover - Best Judgment U. P. Trade Tax Act, 1948 Section 7(3) - Held that - while the Appellate Authority proceeded on the basis that the daily sale was ₹ 3,500/-, the Tribunal held that the daily sale was ₹ 10,000/-. Tribunal, ultimately, assessed the taxable turnover at ₹ 27.75 lacs. Apart from the finding that on 14th April, 2004, revisionist assessee had sold ₹ 3,000/- worth of food from morning till 6 50 PM, there was nothing else available for the Assessing Authority or the Appellate Authority or the Tribunal to reasonably assess the turnover for the said financial year. In addition to that, the fact remains that the turnovers for the subsequent years were accepted at substantially low figures - Therefore, neither the assessment by the original Authority, nor the assessments by the Appellate Authority or by the Tribunal are sustainable. They are, accordingly, quashed. The matter is remitted back to the Assessing Authority to make a fair assessment on the basis of materials available on record - Decided in favour of assessee.
Issues: Unreasonable assessment of turnover based on assumptions without proper basis.
Analysis: 1. The judgment revolves around the unreasonable assessment of turnover for the financial year 2004-2005 based on assumptions without a proper basis. A survey conducted in the eatery of the revisionist assessee on 14th April, 2004, revealed a sale of approximately Rs. 3,000 from morning till 6:50 PM. However, the Assessing Officer assumed a daily sale of Rs. 20,000 without any concrete basis, leading to an assessed turnover of Rs. 59,00,000 for the year. Subsequent assessments for the years 2005-2006 and 2006-2007 accepted much lower turnovers of Rs. 2.63 lacs and Rs. 5.15 lacs, respectively. The Appellate Authority fixed the annual turnover for 2004-2005 at Rs. 12.40 lacs, while the Tribunal set it at Rs. 27.75 lacs, differing on the daily sale amount of Rs. 3,500 and Rs. 10,000, respectively. 2. The judgment concludes that the assessments by the original Authority, Appellate Authority, and Tribunal are not sustainable due to the lack of reasonable basis and inconsistency with turnovers for subsequent years. Consequently, the assessments are quashed, and the matter is remitted back to the Assessing Authority for a fair assessment based on available record materials. The Assessing Authority is directed to provide a reasonable opportunity of hearing to the revisionist assessee during the reassessment process to ensure fairness and adherence to principles of natural justice. 3. The commercial tax revision is disposed of with the decision to remit the matter back to the Assessing Authority for a fresh assessment, emphasizing the importance of conducting a fair evaluation based on actual evidence and providing the assessee with a proper opportunity to present their case.
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