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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 ..... he dealer from ₹ 140 to ₹ 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 ₹ 140 according to the learned assessing officer the same should be ₹ 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 ₹ 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, it is trite law that the estimate should be based on material. The groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 officer while completing the assessment added 10 per cent of the quantity of mohua flower shown by the petitioner towards the driage and wastage and estimated the total quantity of purchase of mohua flower at 4,818 quintals. He also estimated the purchase price of mohua flower at Rs. 150 as against Rs. 140 per quintal shown by the petitioner on the ground that the purchase price shown by the petitioner was not supported by any evidence. Accordingly, the assessing officer determined the purchase turnover of mohua flower at Rs. 7,22,799 and levied eight per cent tax on such turnover while completing the assessment under section 12(4) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hown 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 decide an issue involved in the assessment. For determining the controversy, it is relevant to quote the definition of the terms "turnover of purchase" and "purchase price" as defined under the Act. The term "turnover of purchase" has been defined under section 2(j) of the Act as follows: "Section 2(j): 'turnover of purchases' means the aggregate of the amounts of purchase prices paid and payable by a dealer in respect of the purchase or supply of goods or classes of goods declared under section 3B." The term "purchase price" has been defined in section 2(ee) of the Act as follows: "Section 2(ee): 'purchase price' means the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial 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 had no proof as regards suppression of purchase made by the dealer-appellant, the learned Sales Tax Officer is not at all justified to add 10 per cent towards driage and wastage and to arrive at purchase quantity of mohua flower. I find some justification in the arguments of the learned tax practitioner. Purchase quantity of mohua flower is estimated at Q. 4,380.60 as certified by the Superintendent of Excise, Kalahandi in Memo No. 1803, dated August 26, 1993 . . ." The learned Tribunal without assigning any reason has sustained the addition of 10 per cent towards driage and wastage as made by the assessing officer for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut 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, it is trite law that the estimate should be based on material. In this context it would be useful to refer some of the decisions of the honourable Supreme Court and High Courts. The honourable Supreme Court in State of Kerala v. C. Velukutty [1966] 17 STC 465 laid down the law thus: (page 470) ". . . From the discovery of secret accounts in the head office, it does not necessarily follow that a corresponding set of secret accounts were maintained in the branch office, though it is probable that such accounts were maintained. But, as the accounts were secret, it is also not improbable that the branch office might not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axable 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 turnover, as returned by the assessee, need not necessarily have been rejected, but could be accepted if it appeared to be reasonable and proper. Merely because the books of account of the assessee are rejected as unreliable, it cannot be said that the turnover shown by the assessee must necessarily be rejected and that such turnover should be estimated at a higher figure than that returned by the assessee. In spite of such rejection of the assessee's books of account, whether the turnover returned by him should be accepted or whether a higher turnover should be estimated by the assessing authority, must depend upon the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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