2013 (5) TMI 1014 - HC - VAT and Sales Tax

Summary

Issues involved: Assessment of taxable turnover based on discrepancy in stock without quantification during survey under U.P. Trade Tax Act, 1948 for the assessment year 2004-05.

Assessment based on unquantified stock during survey:
The revisionist challenged the assessment of taxable turnover by the authorities solely on the basis of a discrepancy in stock found during a survey, where the stock was not quantified. The assessing authority alleged suppression of sales and purchases due to the variance between actual stock and stock register. However, the tribunal found that the stock was not measured or quantified during the survey. As a result, it was deemed inappropriate to disregard the stock registers without actual quantification during the survey. The tribunal concluded that without quantification, it was impossible to determine if the stock in the books was accurate. Consequently, the assessment made on the basis of the unquantified survey report was deemed erroneous, leading to the setting aside of the impugned orders dated 30.3.2006, 4.8.2006, and 22.5.2007.

Conclusion:
The High Court allowed the revision, emphasizing that the assessment of taxable turnover cannot be solely based on an unquantified stock during a survey, as it is crucial to have accurate quantification to determine the accuracy of stock registers. The tribunal's decision to uphold the assessment was deemed a manifest error of law, leading to the setting aside of the impugned orders.