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Ram Autar Ashok Kumar Vs. Commissioner of Sales Tax - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case NumberSales Tax Reference No. 172 of 1978
Judge
Reported in[1980]45STC366(All)
AppellantRam Autar Ashok Kumar
RespondentCommissioner of Sales Tax
Appellant AdvocateR.D. Gupta, Adv.
Respondent AdvocateStanding Counsel
DispositionPetition allowed
Excerpt:
- - the appellate authority endorsed the reasoning and further found that sale of sutli and chatai made by the assessee was not shown. it could not be assumed that merely because for some reason the account books in the earlier years were rejected they stood condemned for ever......is any material or evidence to justify the rejection of books of account by the learned additional judge (revisions), sales tax?(2) whether, under the facts and circumstances of the case, there is any material or evidence to justify the taxable turnover fixed by the additional judge (revisions) at rs. 4,37,010.30 for the year 1971-72?2. in view of the amendment of section 11 this reference is heard and decided as revision.3. the assessee carried on business in foodgrains, oil-seeds and gur in kachi arhat. the assessment year in dispute is 1970-71. no defects in the assessee's account books were detected. rather it was found to have been maintained with full details yet the assessing authority rejected them because the assessee's account books for 1969-70 were rejected and in survey dated.....
Judgment:

R.M. Sahai, J.

1. The Additional Judge (Revisions), Sales Tax, Aligarh, referred the following questions of law under Section 11(1) of the U.P. Sales Tax Act:

(1) Whether, under the facts and circumstances of the case, there is any material or evidence to justify the rejection of books of account by the learned Additional Judge (Revisions), Sales Tax?

(2) Whether, under the facts and circumstances of the case, there is any material or evidence to justify the taxable turnover fixed by the Additional Judge (Revisions) at Rs. 4,37,010.30 for the year 1971-72?

2. In view of the amendment of Section 11 this reference is heard and decided as revision.

3. The assessee carried on business in foodgrains, oil-seeds and gur in kachi arhat. The assessment year in dispute is 1970-71. No defects in the assessee's account books were detected. Rather it was found to have been maintained with full details yet the assessing authority rejected them because the assessee's account books for 1969-70 were rejected and in survey dated 30th January, 1975, relevant for the assessment year 1974-75, the stock of gur was not found recorded in the account books. From these circumstances, he inferred that the assessee was evading payment of tax and his account books could not be accepted. The appellate authority endorsed the reasoning and further found that sale of sutli and chatai made by the assessee was not shown. The Additional Judge (Revisions) affirmed the finding recorded by the appellate authority.

4. If the finding of the appellate authority that the assessee did not disclose sale of chatai and sutli is upheld, the finding on rejection of the account books is unassailable. The statement of case submitted by the Additional Judge (Revisions) on this aspect is not of any assistance. From the order of the Sales Tax Officer, however, it appears that the assessee claimed non-taxability of these items as they were used as packing material. The non-inclusion in taxable turnover is not the same thing as non-disclosure. The account books could not, therefore, be rejected on this ground.

5. As regards the rejection of account books for 1969-70 and survey dated 30th January, 1975, they obviously did not relate to the year in dispute. The account books for each year had to be considered as each assessment year is independent. It could not be assumed that merely because for some reason the account books in the earlier years were rejected they stood condemned for ever. The learned standing counsel relied on Sunder Lal Kunj Behari Lal v. Commissioner of Sales Tax 1976 A.T.J. 1 and urged that rejection of account books for earlier and succeeding years furnished material for rejection of account books in the intervening year. The ratio of the case is not applicable to the facts of the case as except for survey in 1975 there is nothing to indicate that the assessee's account (1) 1976 A.T.J. 1 books for the succeeding year were rejected. Reliance was placed on Vishwanath Seth v. Commissioner, Sales Tax 1971 U.P.T.C. 402. In this case, the assessment year in dispute was 1959-60. It was found that the figures in the return did not tally with the figures in the account books. And there were unvouched sales and purchases. Added to these was the survey in the immediately preceding and succeeding years. It was held that:

The Judge (Revisions) could legitimately draw an inference from the survey reports that the business method of the assessee was not in all probability fair in 1959-60. The three surveys related pattern of conduct and might raise a presumption that the same pattern continued in 1959-60.

6. This decision also does not appear to be helpful. The Judge (Revisions) may be entitled to draw an inference and raise presumption if the assessee does not maintain any account book or the account books are found to be defective. But once the assessing authority found that the account books were maintained in detail and they did not disclose any discrepancy, the scope of inference and presumptions stood ruled out. The rejection of account books is not based on any material but on assumption. The finding therefore of the Additional Judge (Revisions) that the account books of the assessee were liable to rejection cannot be maintained.

7. In the result, this revision succeeds and is allowed. A copy of this order shall be sent to the Judge (Revisions) to pass appropriate orders under Section 11(8) of the Sales Tax Act.

8. The assessee shall be entitled to his cost, which is assessed at Rs. 200.


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