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TMI Blog1984 (1) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... s, mohua flowers, seasonal goods and oils of different varieties on wholesale basis. He disclosed gross turnover and taxable turnover at Rs. 84,83,065.52 and Rs. 7,10,068.38 respectively, which were not accepted to be true and correct. The Sales Tax Officer determined the gross turnover at Rs. 89,93,065 and taxable turnover at Rs. 11,11,256.50. He rejected the books of account on the following grounds: "On detailed verification of his books of accounts, it was revealed that all his local purchases of seasonal commodities like horse grams, black grams, groundnuts and oil-seeds and forest products like mohua flower, etc., are not covered by purchase memos. Most of such commodities were purchased from producers and purchase invoices prepared i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal as well as the other two forums it is evident that they have arbitrarily enhanced the gross turnover and the taxable turnover. The assessment made has no reasonable nexus to the materials available on record. In support of his contention he relied on a decision of the Supreme Court reported in [1957] 8 STC 770 (SC) (Raghubar Mandal Harihar Mandal v. State of Bihar) wherein it has been held: "...........Having rejected the returns and the books of account, the assessing authorities proceeded to estimate the gross turnover. In so estimating the gross turnover, they did not refer to any materials at all. On the contrary, they indulged in a pure guess and adopted a figure without reference to any evidence or any material at all. Let u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though there is an element of guess-work in a best judgment assessment, it shall not be a wild one, but shall have a reasonable nexus to the available material and the circumstances of each case. Though sub-section (2) of section 12 of the Act provides for a summary method because of the default of the assessee, it does not enable the assessing authority to function capriciously without regard for the available material." 4.. In reply, learned counsel appearing for the department relied on a decision reported in [1975] 35 STC 335 (New Orissa Traders, Sambalpur v. State of Orissa) where this Court held: "Once the accounts are d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The estimate is required to be according to the best judgment of the assessing officer and the High Court in a reference would, therefore, have no jurisdiction to substitute its best judgment for that of the statutory authority. But, where there is caprice or arbitrariness in making the assessment according to the best of judgment, the same becomes vulnerable. A Bench of this Court in the case of Allied Dealers v. State of Orissa [1972] 29 STC 464, relying upon an earlier decision of the Supreme Court has indicated the limitations, which, in our view, are appropriate". 5.. After hearing counsel for both sides, keeping the principles referred to above in view and in the facts and circumstances of the case we are of the opinion that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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