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TMI Blog2008 (7) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... r of law in deciding an issue which was neither taken in the grounds of appeal nor raised by the petitioner or the opposite party before the Tribunal at the time of hearing of the appeal? The background facts under which this tax revision petition has been filed are as follows: The petitioner in the present case is a registered dealer under the Orissa Sales Tax Act, 1947 (hereinafter referred to as "the Act"). During the relevant year he was a liquor vendor carrying on business in selling of country liquor. For the purpose of his business he purchased mohua flower out of which country liquor has been extracted. In response to a notice issued under section 12(4) of the Act for the year 1992-93 the petitioner appeared before the Sales Tax Officer, Kesinga (hereinafter referred to as the "assessing officer") and contended that during the year he purchased mohua flower weighing 4,380.60 quintals. In support of his contention he produced the certificate issued by the Superintendent of Excise, who had certified that the petitioner purchased mohua flower to the extent of 4,380.60 quintals. During the relevant time mohua flower was subject to tax on turnover of purchase. The assessing off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quintal." The present tax revision case arises out of this order of the learned Tribunal. Mr. Raman, learned counsel appearing on behalf of the petitioner, submitted that the quantity of mohua flower shown by the petitioner was supported by a certificate issued by the Superintendent of Excise and, therefore, there is no reason to make addition of 10 per cent on the purchase turnover towards driage and wastage while the mohua flower was exigible to tax on turnover of purchase. He also contended that the learned assessing officer has not brought any material on record to enhance the purchase turnover of mohua flower and its price shown by the petitioner. His further contention is that in absence of any ground taken by the Revenue against the finding of the first appellate authority that the turnover of the purchase of mohua flower disclosed by the petitioner and supported by a certificate of Superintendent of Excise, cannot be enhanced, the learned Tribunal committed error in reversing the said finding. Mr. Kar, learned counsel appearing on behalf of the Revenue, has not seriously objected to the above submissions of Mr. Raman except that the learned Tribunal has ample power to deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards driage and wastage to the quantity of mohua flower disclosed by the petitioner and supported by the certificate of Superintendent of Excise for the purpose of levy tax on the turnover of purchase of mohua flower which is liable to tax on turnover of purchase under the OST Act. The second issue herein as to whether in absence of any adverse material on record the turnover of the dealer can be enhanced. As disclosed earlier, the petitioner has disclosed his purchase turnover of mohua flower at 4,380.60 quintals. The same has been supported by a certificate issued by the Superintendent of Excise. Contrary to the same, no material has been brought on record that during the relevant period the petitioner purchased mohua flower more than what is disclosed by him and supported by a certificate issued by the Superintendent of Excise. While deleting the addition on purchase quantity of mohua flower, the first appellate authority at paragraph 5 of its order held as follows: ". . . At this stage, the learned tax practitioner stated that when the purchase quantity of mohua flower had been certified by the Superintendent of Excise to the extent of Q. 4,380.60 and when the assessing officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided in sub-section (9) of section 12 of the Act before enhancing the purchase price shown by the dealer from Rs. 140 to Rs. 150 per quintal. Another important aspect is that only when the assessing officer shall be satisfied that the purchase/sale price shown by the appellant is unreasonably low compared to the prevailing market price of such goods, he is authorised to enhance the same by following the procedure laid down in sub-section (9) of section 12 of the Act. In the present case while the petitioner disclosed the purchased price at Rs. 140 according to the learned assessing officer the same should be Rs. 150 without bringing any supporting material on record. Thus, it cannot be said that the purchase shown by the petitioner is unreasonable. In that view of the matter, the Tribunal is not justified to sustain the action of the assessing officer in estimating the purchase price of mohua flower at Rs. 150 per quintal on mere suspicion and conjecture. In absence of any adverse material on record to disprove the turnover shown by the petitioner-dealer, the same cannot be enhanced on mere suspicion and conjecture. Even in a case where a best judgment assessment is called for, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available materials on record and the assessment was confirmed by the first appellate authority and the Tribunal, this court held that the enhancement of the gross and the taxable turnovers had no rational basis and had no nexus to the materials available on record and therefore the enhancement of the turnover after rejection of books of account was arbitrary. The Allahabad High Court in Managal Sen Ram Sanohi v. Commissioner of Sales Tax, U.P., Lucknow [1995] 97 STC 15 held that: (page 15) "Even if the books of account are rejected the Tribunal or any other taxing authority cannot arrive at an arbitrary amount of the taxable turnover of the dealer. It has to come to a particular figure on the basis of material on record or on some reasonable principle, taking into account the purchases or sales made, which may be determined from the records either seized or found in the possession of the dealer. Arriving at a random figure without any basis is not justified in tax law." The Allahabad High Court in Commissioner of Sales Tax v. Pilot Shoe Factory [1977] 39 STC 95 held that on the facts and in the circumstances of the case, when the assessee's books of account were rejected, the tu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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