9911796707
TMI Blog1999 (9) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the assessment which was concluded by the assessing authority to the best judgment? (c) Whether, on the facts and the circumstances of the case, the revisional authority is correct in law in holding that the turnover should be determined on the basis of 5 times the expenditure of working expenses? (d) Whether, on the facts and the circumstances of the case, the turnover as determined by the revisional authority is correct and sustainable in law." 2.. The appellant, M/s. Hotel Mayura Restaurant, Bellary, was assessed on best judgment assessment in respect of the assessment year 1990-91, under section 12(3) of the Karnataka Sales Tax Act, 1957, where the total and taxable turnover was determined at a figure of Rs. 7,00,000. It was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on a decision given in the case of P. Narayanappa v. State of Mysore [1962] 13 STC 993 (Mys), wherein, it was observed that: "A general working rule although founded on experience or practical knowledge cannot have the status of a rule of law and does not dispense with the duty to consider in each case whether that rule is a suitable expedient or method for ascertaining the turnover in that case. Although recourse to a flat rate or a rule of averages or any other similar general working rule is on principle unexceptionable, what is open to criticism is the mechanical application of any one of those methods without the examination of its suitability to the case in which it is to be employed even if it has been found to be an efficacious ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d there are number of other factors which could be taken into consideration. It is pointed out by the learned counsel for the respondent that it was by virtue of the experience of the department that in case of restaurant, the turnover is determined at 5 times the establishment expenses or 1 times of the purchase price. Times have changed and the cost of materials have also changed. The formula which is so far been applied may not be universally applicable. In these circumstances, we consider that so far as the assessment on best judgment method which was applied by the assessing authority was justified equally the revising authority was justified in pointing out the various items of the expenses and sale of soft drink which were not taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed goods shall also be enquired. Even the percentage of expenses vis-a-vis could also be enquired. Necessary information would be gathered for that purpose and thereafter, a fresh show cause notice shall be given to the assessee and thereafter the best judgment assessment on the basis of the information so received shall be framed ignoring the figures and formulas adopted in the past. The best judgment assessment and determination of turnover must be based on some evidence on record. The opportunity is required to be given to comply principles of natural justice. If the assessee fails to co-operate and does not furnish information, the respondents would be free to make their own best judgment on the basis of enquiry conducted. 10.. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
