9911796707
TMI Blog1965 (7) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... t calling upon it to appear before the respondent No. 4 on 17th July, 1958, with the material books of accounts. After receipt of the said notice, the appellant made an application on 27th June, 1958, for extension of time to file the return. This application was rejected and thereupon the appellant filed a return on 7th July, 1958. In this return the appellant admitted that it was liable to pay Rs. 283-20 nP. as sales tax, on the taxable turnover at the appellant's head office at Samsi, and branch office at Malda. This admitted liability was discharged by depositing the said sum of Rs. 283-20 nP. in the State Bank of India. The respondent No. 4, however, proceeded with the assessment under section 11 of the Act. The appellant applied for and obtained several adjournments for production of books of account and other material documents. The case was finally fixed for hearing on 22nd July, 1959, when another application for adjournment was made, but was refused. After such refusal the respondent No. 4 completed the assessment to the best of his judgment and found that the gross turnover was Rs. 7,20,813-4-9 pies and the taxable turnover was Rs. 2,86,500. The respondent No. 4 assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us names during the year of assessment and was called upon to produce the relevant entries in the books of account. On 13th February, 1959, the appellant submitted before the respondent No. 4 that most of the transactions could not be located in the books of accounts, and on this submission the respondent No. 4 came to the conclusion that the appellant located at least some of the unauthorised transactions. Thereafter the appellant asked for, and was granted two further adjournments to produce books of account in support of its contentions. The case was fixed for hearing on 22nd July, 1959, on which date another application for adjournment was made and was rejected. 5.. The proceeding against the appellant was commenced on 17th June, 1958. After two adjournments obtained by the appellant, it appeared before the respondent No. 4 on 26th August, 1958, with incomplete books of account. On that date the appellant was asked to furnish complete set of books of account and also the bank statements. Three further adjournments were obtained by the appellant and thereafter it appeared before the respondent No. 4 on 13th January, 1959, but without the books of account and bank statement whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 13,700, the respondent No. 4 had drawn an inference, for which there was no basis. He argued that on the basis of goods worth Rs. 14,146.54 having been brought in course of 79 days, goods worth Rs. 47,058.99 having been brought in course of 109 days and goods worth Rs. 2,694.09 having been brought in course of a month, the respondent proceeded to draw an inference that goods were brought in the same proportion throughout the year, and on this basis the total value of goods surreptitiously brought by the appellant in fictitious names would be Rs. 2,34,000. Adding a five per cent. profit on these goods, the total value of the goods at which they were sold was taken to be Rs. 2,46,000. This total value was added to the value of the gross turnover in the return filed by the appellant which was Rs. 4,74,813.9 pies. Adding the two figures of gross turnover the total gross turnover of the appellant was fixed at Rs. 7,20,813-4-9 pies and accordingly the gross turnover of the appellant was assessed at the same figure. On the basis of this turnover the tax was assessed at Rs. 13,700. 9.. It was argued by Mr. Sen Gupta that there was no basis for the inference drawn by respondent No. 4 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tt's case(1957) 61 C.W.N. 953. and the observations of the judicial Committee are entirely against the contentions of Mr. Sen Gupta. It is true that the respondent No. 4 had drawn an inference with regard to the value of the gross turnover of the appellant, but in doing so he had proceeded on some basis, namely, the value of the goods which according to him were brought by the appellant in fictitious names during certain periods of the assessment year. We cannot, therefore, hold that the respondent No. 4 in drawing the inference, which he did, proceeded entirely arbitrarily or capriciously or dishonestly. He had before him the figures relating to the value of the goods, which according to him, were brought by the appellant in false and fictitious names, and in drawing the inference, he assumed that the appellant had throughout the year brought goods into West Bengal of similar value. We cannot hold that he was wrong in drawing this inference or that this inference was drawn by him entirely arbitrarily or dishonestly. Nor can we hold that there was no basis for the inference drawn by the respondent No. 4. 10.. Mr. Sen Gupta next referred to another Bench decision of this Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of the Supreme Court in Raghubar Mandal Harihar Mandal v. State of Bihar[1957] 8 S.T.C. 770; A.I.R. 1957 S.C. 810. That was a case under the Bihar Sales Tax Act, in which the assessee had failed to file the returns in respect of three quarters out of seven. With regard to the four quarters for which returns were filed, the assessing authority rejected the returns as also the books of account filed by the assessee for all the seven quarters and thereafter made the assessment order on an estimate. The matter went up to the High Court of Patna on a reference made by the Board of Revenue and thereafter to the Supreme Court. It was found that certain transactions were not recorded in the books of account and silver was imported by the assessee in the names of five confederates in order to suppress the details of the transactions. Again there was a discrepancy between the return filed for one quarter and the accounts filed in support of the same. On these facts the assessing authority rejected the returns for the four quarters, which were filed by the assessee. But the Supreme Court held that in proceeding to make an estimate of gross turnover of the assessee, the assessing authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng liability for tax be assailed, on the ground that the assessing authority had acted arbitrarily or capriciously. The respondent No. 4 had some materials before him for drawing the inference which he did. He gave the appellant the opportunity to produce materials to arrive at a correct decision, but the appellant failed to produce any materials although he applied for and obtained several adjournments for that purpose. For these reasons the order made by the respondent No. 4 imposing a liability for sales tax in the sum of Rs. 13,700 cannot be held to be bad. The second contention of Mr. Sen Gupta, therefore, must fail. In our opinion, Banerjee, J., was entirely right in rejecting this contention of the appellant. 12.. The third and the last contention of Mr. Sen Gupta was that the penalty of Rs. 10,000 imposed upon the appellant in exercise of the power conferred by section 11(1) of the Act was not justified. He argued that the delay, according to his client, was only of 22 days and this short delay, he argued, did not merit the heavy penalty of Rs. 10,000. It was further argued that the penalty was imposed without rejecting the contentions raised by the appellant in its appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraph 6 of the petition were also the grounds of the application for extension of time made on behalf of the appellant on 27th June, 1958. But even assuming that the illness of the managing partner's younger brother was made a ground in the said application for extension of time, the order dated 9th July, 1958, undoubtedly has the effect of rejecting the grounds for extension of time prayed for by the appellant. Banerjee, J., dealing with this contention on behalf of the appellant, held that it was the statutory duty of the Commissioner or his delegate, the Commercial Tax Officer, to start proceedings under section 11 of the Act. He also held that the application for extension of time was rightly rejected and that once proceedings under section 11 of the Act were commenced, it was not possible for an assessee to arrest those proceedings by filing a belated return. Mr. Sen Gupta, however, contended that the trial Court was not justified in holding that the penalty of Rs. 10,000 imposed on the appellant could be upheld merely because the statute had imposed upon the assessing authority the power to commence proceedings under section 11 of the Act. 15.. We do not think that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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