Somnath Iyer, J.
1. The source of these three revision petitions is a best judgment assessment of the turnover under section 12(3) of the Mysore Sales Tax Act, 1957, when the petitioner who operates a soda factory at Udipi did not produce a return. He contended that his turnover was less than Rs. 7,500 a year, and so had no duty to produce a return of his turnover.
2. The Commercial Tax Officer made a best judgment assessment following the procedure prescribed in rules 16 and 18 of the Mysore Sales Tax Rules, and that best judgment assessment, which was made under section 12(3), related to the assessment years 1960-61, 1961-62 and 1962-63. The turnover in respect of which there was a best judgment assessment related to what was described as the petitioner's business in the soda factory and also timber, furniture and firewood. For the year 1960-61, the taxable turnover was estimated at Rs. 26,000; for 1961-62 at Rs. 34,000; and for 1962-63 at Rs. 36,000. It is not necessary for us to separate the estimated turnover in respect of the soda factory from the estimated turnover in respect of the other branches of business.
3. The petitioner appealed to the Assistant Commissioner who dismissed the appeals. The Sales Tax Appellate Tribunal to which the petitioner preferred second appeals, dismissed the appeals, but made slight modifications of the estimates made by the Commercial Tax Officer. So, these revision petitions.
4. Mr. Jagannatha Setty maintained the argument that the estimates made by the Commercial Tax Officer were arbitrary and capricious. In addition, he placed before us the argument that the conclusion reached by the Commercial Tax Officer that the petitioner was carrying on a business in timber, firewood and furniture was impossible and was not supported by any evidence.
5. We are of the opinion that both these submissions are substantial. The petitioner asserted at every relevant stage that he maintained no books of account for the obvious reason that the magnitude of the business carried on by him did not require the maintenance of accounts. But the Commercial Tax Officer visited the premises of the petitioner's business on 24th March, 1965, when, according to him, he discovered that the petitioner was employing three workers for the soda business and was effecting 'large scale credit sales to several shopkeepers regularly'. He stated in the course of his order that the large scale credit sales were demonstrated by a small note-book which he found in the business premises.
6. We have looked into the note-book on which the Commercial Tax Officer depended, and we observe that the book contains nothing in demonstration of any large scale credit sales such as those to which the Commercial Tax Officer referred. It is a small note-book in which there are a few pages containing pencil entries which speak of small sums of money which are sometimes as small as a rupee and six annas and not exceeding in other cases a sum of Rs. 34.13 P. These sums of money are entered on different pages. It is difficult to understand how the Commercial Tax Officer thought that it was possible to deduce from the entries made in the tiny little book large scale credit sales to any one.
7. The fact that in the year 1965 when the Commercial Tax Officer visited the petitioner's business premises, he discovered that three workmen had been employed, or the entries in the book which he scrutinised at that point of time, could not reasonably constitute the foundation for the estimates made by him. The estimate must be founded upon some material from which it is possible reasonably to deduce a best judgment assessment.
8. Mr. Shantharaju contended that even if we should think that the notebook upon which the Commercial Tax Officer depended did not assist the estimate made by him, there was the fact that the petitioner had not produced his accounts.
9. But this argument overlooks the assertion made by the petitioner that he maintained no accounts and that the Commercial Tax Officer had no material on the basis of which he could acquire the impression that the petitioner had concealed books of account which indeed had been maintained by him.
10. The principles governing a best judgment assessment are authoritatively stated by the Supreme Court in State of Kerala v. C. Velukutty ( 17 S.T.C. Short Notes 4; 17 S.T.C. 465) and that enunciation makes it clear that the best judgment assessment cannot be a mere speculation but must be founded upon material which can yield the estimate made by the Commercial Tax Officer, and that foundation was obviously non-existent in the case before us.
11. While this is the position with respect to the soda factory, the conclusion drawn by the Commercial Tax Officer that the petitioner was carrying on a business in firewood, furniture and timber was no more than a speculation. The sole basis for this conclusion was the statement made by the petitioner's son Padmanabha Shenoy that he was carrying on such business. The Commercial Tax Officer thought that since the petitioner and his son Padmanabha Shenoy were members of a Hindu joint family, the business carried on by the son, unless the contrary is proved, must be presumed to be joint family business. This conclusion reached by him suffers from the infirmity that there is no such presumption, and that in each case the question whether the business is the separate business of the son or the joint family business, must depend upon the facts and circumstances of that case. The Commercial Tax Officer had no evidence before him that the business, which at some point of time Padmanabha Shenoy carried on, was family business in which the petitioner had also an interest.
12. The reasoning employed by the Assistant Commissioner and the Appellate Tribunal is similar to that employed by the Commercial Tax Officer, and so invites the same criticism which the Commercial Tax Officer's reasoning invites.
13. We therefore allow these three revision petitions and set aside the assessment made by the Commercial Tax Officer and the orders made by the Assistant Commissioner and the Sales Tax Appellate Tribunal in the appeals preferred by the petitioner.
14. The petitioner will get his costs in these three revision petitions. Advocate's fee Rs. 100, one set.
15. Petitions allowed.