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TMI Blog1964 (12) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... by exhibit P5. But overruling his objections, the assessment order in question has been passed adding 10 per cent. to the net turnover as computed by the assessing authority from the books of account of the assessee. The 10 per cent. comes to Rs. 27,60,883.60. A copy of the assessment order is exhibit P6. It is this order, exhibit P6, that has been challenged in this writ application. 2.. According to counsel for the petitioner, exhibit P6 evidences a capricious and arbitrary assessment without any material to support the conclusion and is the pure result of surmises and conjectures. He, therefore, prays that a writ be issued quashing the order, exhibit P6. 3.. A preliminary objection has been raised that the petitioner has adequate alternative remedy under the statute and, therefore, this writ application should not be entertained. This, in fact, was the only argument that has been advanced by counsel on behalf of the Revenue. This question has, therefore, to be examined. I shall refer to the facts relating to the assessment, which I consider necessary, for the determination of this issue. 4.. Certain reasons have been given in exhibit P1 for rejecting the accounts and notwi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y his books and that in any event there was no justification for adding 10 per cent. to the net turnover as disclosed by the books. The answers to these objections, if any, are in the order, exhibit P6, and are the following: "The turnover as per books and that as disclosed by the returns does not agree................The explanations regarding the alleged borrowing are unacceptable........................The contention that only actuals can be added on towards suppression cannot be accepted................." The reason for doubting whether there has been borrowing is stated thus: "It is common knowledge that usurers charge exhorbitantly high rate of interest and none would go in for a loan unless one is so hardpressed." And, regarding the contentions of the petitioner relating to the entries in the "secret books" of Messrs. Vasu and Janardhanan, what is stated is: "Collusion and collaboration are the keynote of evasion as without which the delinquent will be found out by the normal routine cross verification of transactions at the time of final assessment. So apart from the regular books of accounts which are kept for inspection and production before Income-tax and Sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of the turnover computed by the respondent from the books of account. How this will help in coming to the conclusion that there should be an addition of 10 per cent., I am unable to follow. 7.. The only other material was the entries in the secret account books of Messrs. Vasu and Janardhanan. It has to be mentioned here that these books are not of the assessee and have not been recovered from the assessee. Out of the amounts seen in these books all but Rs. 3,531.21 is seen entered in the books of account maintained by the assessee. Apart from those two items of material relied on there is, of course, the opinion of the Sales Tax Officer that "none would go in for a loan unless one is so hard-pressed". He has not found that the assessee has not actually borrowed the money. No attempt has been made to find out the truth or otherwise of the transactions of borrowing relied on by the assessee. 8.. Whether a business man dealing in goods to the tune of nearly a lakh of rupees each day should or should not maintain cash reserves of a particular amount by borrowing certain amounts-the maximum of such borrowings in this case being Rs. 75,000-is a matter which must be left to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atlal Harilal Mehta v. State of Madhya Pradesh[1954] S.C.R. 1122; 5 S.T.C. 115.). 12.. It appears to me that in cases of this nature this Court should interfere, for, I consider that the remedy available by way of appeal to the appellate authority and then by way of second appeal to the Tribunal and then a revision to this Court is not adequate where an assessee like the petitioner before me is compelled in the meantime to pay the tax imposed on him by an arbitrary assessment which has been solely guided by the whim and fancy of the assessing authority. It is very seldom, if ever, that the appellate authorities in this State grant a stay of the payment of the tax imposed on an assessee by an assessment order whether it be arbitrary or otherwise. In fact, not a single case has come up before me where the appellate authority or the Tribunal had granted a stay of the collection of the tax imposed on an assessee. And, it would take years before an assessee is able to reach this Court in revision to have a final adjudication. In these circumstances, the remedies under the statute, I feel, are not even adequate and in the case of arbitrary assessments such as the one evidenced by exhib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally in the way I have described, or have not determined the question which they are required by the Act to determine, then there is a remedy by mandamus and certiorari." The same principle was reiterated by the House of Lords in the decision in Local Government Board v. Arlidge[1915] A.C. 120. Viscount Haldane, Lord Chancellor quoted with approval the decision of Lord Loreburn and said: "I agree with the view expressed in an analogous case by my noble and learned friend Lord Loreburn. In Board of Education v. Rice[1911] A.C. 179., he laid down that, in disposing of a question which was the subject of an appeal to it, the Board of Education was under a duty to act in good faith, and to listen fairly to both sides, inasmuch as that was a duty which lay on everyone who decided anything." 15.. If the materials available are disregarded or if the quasijudicial authority refuses to apply its mind to the question and if he reaches a conclusion which bears no relation to the facts before him, I think, to allow those decisions to stand would be violative of the principles of natural justice. Arbitrary decisions can also, therefore, result in violation of the principles of natural jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. have been made are seen from page 415 of the report: "In the present case the company invoked the jurisdiction of the High Court on questions of fact as well as on the constitutionality of the taxing statute and breach of fundamental rights. The High Court instead of determining the constitutional questions, on which alone the petition could normally be entertained, proceeded to investigate the correctness of an assumption made by the company, and thereby decided the case which was not expressly raised by the other party. In doing so the High Court fell into an error and assumed jurisdiction to decide the dispute which had to be decided by resort to the machinery provided under the Act after ascertainment of the true nature of the transaction in the light of the agreement and surrounding circumstances. The order passed by the High Court cannot therefore be to upheld." 19.. I am unable to discern anything in the above decision or in the decisions of my learned brother Mr. Justice K.K. Mathew in O.P. Nos. 767 and 791 of 1963 on which too reliance was placed which militate against what I have stated above. 20.. It is too well-established a principle to be sought to be suppor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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