1979 (2) TMI 209 - HC - VAT and Sales Tax

Summary

Issues:
1. Rejection of accounts by the Sales Tax Officer.
2. Compliance with Section 8-A(3) regarding issuance of cash memos or credit memos.
3. Contention regarding the customary practice of not issuing cash memos or credit memos in the type of business conducted by the assessee.

Analysis:
1. The Sales Tax Officer rejected the assessee's accounts due to the absence of cash memos before a specific date and the recording of sales on a lump sum basis. The rejection led to an estimate of turnover, which was partially successful on appeal. The Revising Authority upheld the rejection citing lack of vouched sales before a certain date and absence of credit memos. The authority also noted the inability to provide itemized accounts of non-taxable purchases.

2. The main contention revolved around the requirement to issue cash memos or credit memos as per Section 8-A(3) of the Act. The argument was that since the obligation to issue such memos arose after a legislative amendment, the prior non-issuance should not justify account rejection. However, the court clarified that Section 8-A(3) mandated all dealers who charged tax to issue such memos, irrespective of the introduction date of the provision. Failure to comply could lead to account rejection, as it was crucial for revenue protection.

3. The assessee argued that the business nature did not necessitate issuing cash or credit memos, citing precedents. The court examined these cases and differentiated them based on specific circumstances. It emphasized that the absence of such documents could be a valid reason for account rejection, especially considering the provisions of Section 8-A(3). The court highlighted that the authority was justified in rejecting the accounts due to non-compliance with the memo issuance requirement.

In conclusion, the revision was dismissed, upholding the rejection of accounts by the Sales Tax Officer and the Revising Authority. The court emphasized the importance of complying with statutory provisions like Section 8-A(3) to prevent tax evasion and safeguard revenue interests. The Department was awarded costs amounting to Rs. 200.