9911796707
TMI Blog1997 (11) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... llows: The applicant is a proprietor of the business concern run in the name and style M/s. Visco Engineering Works and is engaged in manufacture of machine parts as well as in machining job on materials against labour charges. Because of drop in the sales of manufactured goods, the applicant's business has remained confined mostly to machining job. For the period of four quarters ending on December 31, 1987 the applicant submitted his returns showing the gross receipt for the year as Rs. 92,854.84, comprising labour charges of Rs. 68,259.13, delivery charges of Rs. 2,492.50, sales to the registered dealers of Rs. 7,558.81 and labour charges of Rs. 14,544.40 effected outside West Bengal. But according to the books of accounts of the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axes Revisional Appellate Board (in short, "the Board"). The Board affirmed the appellate order so far as estimation of gross turnover of Rs. 3,00,000, imposition of penalty of Rs. 1,000, disallowance of labour charges of Rs. 84,324.93 (including the part related to Central sales tax) and the claim of exemption of Rs. 13,985 under section 5(2)(a)(v) of the Act are concerned. The Board however, set aside the levy of interest of Rs. 29,492. The applicant has, therefore, moved the instant application before this Tribunal alleging, inter alia, that the purported best judgment assessment by the respondent No. 2 is arbitrary and is not based on any material whatsoever and that the estimation of gross turnover has been made several times more than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant's plea of invalidity of the demand notice on the ground of non-affording 30 days' statutory period for making payment, is an innovative stance since such plea was never taken before the appellate or the revisional forum. According to the respondents the best judgment assessment was made bona fide with due application of mind. 4.. The debated question here is whether the assessment in question can be said to be the best judgment assessment with due application of mind. 5.. Section 11(1) of the 1941 Act contains the provision authorising the assessing authority "to assess to the best of his judgment the amount of tax due from a dealer when such dealer fails to furnish any return by the prescribed date or if the authority is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a guess; but the estimate must be related to some evidence or material and it must be something more than mere suspicion. To use the words of Lord Russell of Killowen again, 'he must make what he honestly believes to be a fair estimate of the proper figure of assessment' and for this purpose he must take into consideration such materials as the assessing officer has before him, including the assessee's circumstances, knowledge of previous returns and all other matters which the assessing officer thinks will assist him in arriving at a fair and proper estimate. In the case under our consideration, the assessing officer did not do so, and that is where the grievance of the assessee arises." 6.. At page 4 of the application the applicant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for the year was Rs. 92,854.84 inclusive of labour charges of Rs. 68,259.13 received from the local customers and Rs. 14,544.40 received from the customers outside the State. But according to the books of accounts gross receipt is Rs. 92,295.44 inclusive of labour charges of Rs. 70,339.93 received from the local customers and labour charges of Rs. 13,985 received from the customers outside the State (the remaining amount of Rs. 7,970.51 is on account of sales to the registered dealer). The applicant has admitted that there is a discrepancy of Rs. 559.40 (real discrepancy is Rs. 659.40) between the figures given in the returns and the figures available from the books of accounts. The applicant explains these discrepancies by saying that wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guess-work in the matter, it must be honest guess-work". In the case before us, the assessing officer cannot be said to have done an honest guess-work. In our opinion, the assessment is absolutely arbitrary. The appellate authority who had opportunity to examine the books of accounts only reduced the assessed gross turnover to Rs. 3,00,000 and taxable specified purchase price to Rs. 50,000 but has rejected other contentions of the appellant (the applicant before us) on the ground of discrepancy of Rs. 559.40 and the absence of full fledged account registers for the job-work and failure to maintain manufacturing accounts. But he has not adduced any reasoning as to why the assessment should be so shockingly high. The board has only echoed the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
