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TMI Blog1973 (7) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... e possession of the Sales Tax Officer and his satisfaction required under section 18(1) of the Bihar Sales Tax Act, 1959, so as to invest him with jurisdiction to initiate proceedings under that section. (2) Whether the completion of assessment on the alleged escaped turnover to the best of judgment under section 18(1) of the Bihar Sales Tax Act, 1959, is justified and legal in view of the fact that there is no evidence on the record that the turnover of the applicant for the period 1962-63 actually escaped assessment, and whether the amount is not vitiated in any case on the grounds of illegality for denial of permissive deduction on the ground of tax-free goods in the sales disclosed by the entries of the seized books as enjoined in the provision of section 18(1)(a) of the Act. (3) Whether the imposition of penalty under section 18(2) of the Act without issue of the prescribed mandatory notice, and without affording the assessee an opportunity to be heard as required under the second proviso thereof and without establishing the actual suppression of sales in 1962-63 is justified and legal. (4) Whether, in the facts and circumstances of the case, the alleged suppression of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner's petition in revision. On behalf of the assessee, it was urged before the Tribunal that the assessing officer had no jurisdiction to pass an assessment order under section 18(1) of the Act as the conditions prerequisite for making an order under that provision of law were not fulfilled. The other point urged on behalf of the assessee was that imposition of penalty under section 18(2) of the Act without estimating actual suppression of sales during the period 1962-63 was unwarranted. The Tribunal found no force in these contentions and, accordingly, rejected them. 5.. From the facts as noticed by the Tribunal in its revisional order, it is clear that the suppressed books of account being books Nos. 1 to 4 relate to a period from 1st September, 1963, to 12th January, 1964. On the entry relating to 1st September, 1963, since there was an opening balance, the assessee was asked to produce the corresponding previous books which, it was rightly assumed, had also been suppressed. The assessee thereafter submitted some books of account starting from 25th July, 1963, and ending on 31st August, 1963, and obviously, it was contended on behalf of the assessee that since there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or a dealer assessed under sub-section (5) of section 16 has been under-assessed or assessed at a rate lower than that which was correctly applicable or any deductions therefrom have been wrongly made, the prescribed authority may, subject to such rules as may be made by the State Government under this Act, and, (a) within eight years of the expiry of such period, where the said authority has reasons to believe that the dealer has concealed, omitted or failed to disclose fully the particulars of such turnover or has furnished incorrect particulars of such turnover and thereby returned figures below the real amount; (b) within six years of the expiry of such period in any other case,...................................." 7.. On the plain language of section 18 of the Act, it is clear that the information which has come into the possession of the assessing authority and on the basis of which reasonable grounds may induce it to be satisfied to believe that there has been a case of escaped assessment must be in relation to, or in respect of, the period of assessment. There is neither any presumption under the general law nor can anything be culled out from the provisions of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al discovered during the survey. If the material so discovered relates to suppression for a particular assessment year in which the survey is made, then the survey report is not material for other years, but if the material discovered relates to suppression for different years, the survey becomes relevant for those years. One of the questions referred to the High Court in the aforesaid case was whether the fact that some suppression was detected in the year 1961-62 would in law justify an inference that the assessee must have suppressed sales in other assessment years, and the answer given was that the suppression detected in the year 1961-62 could not by itself justify an inference that the assessee must have suppressed the sales in other years. It would thus be seen that, in principle, the Allahabad High Court held that the information derived from any survey in one year must relate to other years before the assessment of these years could be reopened on the basis of such information. 9.. On the facts of the present case, as stated above, it will be noticed that there was no material on record which could connect the clandestine transactions found to have been indulged in durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I also answer the same in favour of the assessee and hold that, in the facts and circumstances of this case, imposition of penalty under section 18(2) of the Act was not rightly upheld by the Tribunal. Tax Case No. 27 of 1968. 12.. This is a reference under section 33(1) of the Act in which the Tribunal has referred the following two questions to this court: "(1) Whether the production of declarations before the appellate authority can be deemed to be sufficient compliance of the requirements of the Bihar Sales Tax Act, 1959, and the Rules framed thereunder, for allowing the claim of deduction on account of sale of tax-paid goods? (2) Whether in the case of an assessment to the best of judgment a dealer is legally entitled to get a reasonable deduction on account of sale of tax-free and tax-paid goods out of the turnover determined for the purposes of assessment, without producing the documentary evidence for claiming such deduction?" 13.. This case relates to the assessment of sales tax on the assessee for the year 1963-64 on the basis of best judgment assessment. The facts and circumstances giving rise to such best judgment assessment, namely, surprise raid, seizure of book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the return were mandatory, it was not open to the Deputy Commissioner hearing the appeal to take into evidence the form IXC declarations, which were produced by the assessee at the appellate stage. Though there are indications in the order of the Tribunal that there may have been a failure to submit the form IXC declarations by the assessee along with the return on account of some bona fide mistake yet the Tribunal did not choose to decide the question of sufficiency of cause or bona fides of the assessee or otherwise, but merely rejected the claim of the assessee on the ground that the appellate court had no jurisdiction to entertain any additional evidence as already stated. 17.. With regard to the second point urged before the Tribunal, the Tribunal held that since in the amount of turnover with regard to which 25 per cent was claimed by the assessee as exemption on account of sale of tax-free and tax-paid goods, there was nothing to show as to what was the amount of tax paid at source on the goods with regard to which exemption was sought to be claimed, it was not possible to determine the amount of turnover relating to tax-free goods. There was thus no material on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , could ask it to make a further enquiry and pass a fresh assessment order". 20.. Having discussed the question at length, this court held that there was ample power under section 30 of the Act, vested in the appellate authority, to take additional evidence in the shape of correct declaration forms at the appellate stage. It was also held that similar powers could be exercised by the court while exercising its revisional jurisdiction under section 31 of the Act. In that view of the matter, I answer the first question as reframed in favour of the assessee and against the Commercial Taxes Department. 21.. So far as the second question referred to this court is concerned, it is the admitted case that the 25 per cent exemption over the suppressed turnover which is being claimed by the assessee was merely on the basis of estimate, and that too not only of tax-free goods but the tax-paid goods lumped up with tax-free goods. The assessee has nowhere at any stage of the proceedings been able to show as to which part of this exemption claimed by it relates to tax-free goods and which are to tax-paid goods. In the absence of any such bifurcation, the Tribunal has, in my opinion, rightly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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