R.L. Gulati, J.
1. In cornpliance with the order of this court under Section 11(4) of the U. P. Sales Tax Act the Additional Judge (Revisions), Sales Tax, Agra, has submitted this combined statement of the case for the assessment years 1959-60, 1960-61, 1961-62, 1962-63, 1963-64, 1964-65 and 1965-66 and the following three common questions of law have been referred:
(1) Whether the survey report dated 9th May, 1961, was relevant for the assessment years in dispute other than 1961-62 ?
(2) Whether the fact that some suppression was detected in the year 1961-62 would in law justify an inference that the assessee must have suppressed sales in other assessment years in question for determining the quantum of turnover for each of those years ?
(3) Whether there was any material for rejecting the account books of the assessee for the assessment years other than 1961-62 ?
2. The assessee is a dealer in silver ornaments at Agra. The assessee's shop was surveyed on 9th May, 1961, at about 7.15 p.m. and it was found that till then no entries regarding sales or purchases had been made in the account books. A sum of Rs. 5,660 was found in the till while the account books disclosed a balance of Rs. 1,834 and odd. There was thus an excess of cash to the extent of Rs, 3,826. The assessee's explanation that the excess amount included a sum of Rs. 3,500 given to him by his brother Mewa Lal for safe custody and Rs. 400 by Hukam Chand was disbelieved and the excess amount was held to be suppressed turnover. At the time of the survey one Dharam Kanta receipt relating to 274 bars of silver was also detected at the shop of the assessee. The assessee denied its ownership. His explanation has been rejected at all stages. The Sales Tax Officer did not accept the return filed by the assessee and enhanced the turnover of all the years. On appeal, the rejection of account books was upheld, but the turnover was reduced. The assessee and the department both went up in revision. The revising authority set aside the appellate order and restored that of the assessing officer for the assessment years 1959-60 and 1961-62. For the year 1962-63 the revising authority fixed the turnover at Rs. 1,60,000 and for the remaining assessment years he confirmed the order of the appellate authority. At the instance of the assessee these references have been submitted to us.
3. As regards the rejection of the account books, it has been stated in the statement of the case that three circumstances were relied upon, namely, (i) the survey dated 9th May, 1961, (ii) the purchases were not vouched, and (iii) the sales were not commensurate with the stock and the investment.
4. As regards the survey report it may be mentioned that there is no general rule that the result of a survey carried out during one year is not relevant for other years. It is not the date of the survey which is material, but what is material is the nature of the evidence or the material discovered during the survey. If the material so discovered relates to suppression for a particular assessment year in which the survey is made, then the survey report is not material for other years, but if the material discovered relates to suppression for different years, the survey becomes relevant for those years. So far as the veracity of the accounts is concerned, if the accounts for the remaining other years are otherwise found to be defective and are rejected, the survey of one year becomes relevant while fixing the turnover.
5. In the instant case the survey was directly relevant for the assessment year 1961-62 when a suppression in the turnover of Rs. 3,826 was discoverd. On the basis of that survey the assessment for the year 1961-62 was completed. During the subsequent years the accounts were found to be defective inasmuch as all U.P. purchases were unvouched in all the years. In 1962-63 more than half of the total purchases were unvouched. In 1964-65 about one-third of the total purchases were unvouched and in 1965-66 one-tenth of the total purchases were unvouched. Sales were also not commensurate with the stock. This, in our opinion, was sufficient material upon the basis of which the account books of the remaining years could be rejected.
6. Once the books of account are rejected, the turnover has to be estimated and in the estimate of the turnover, the past record of the assessee, his method of account keeping and his general reputation in the market become relevant. We are, therefore, satisfied that the assessee's account books were rightly rejected in all the years.
7. As regards the quantum of the turnover, the same has been fixed by the Judge (Revisions) by reference to the stock position. It is a well-known commercial practice that in order to determine the turnover of a particular year, the stock position is taken into account. It is generally believed that in most of the trades the turnover is about four times of the stock. The revising authority has kept in view this commercial practice. In the assessment year in which he found that the turnover has been estimated at more than four times of the stock, he has reduced the same and where he found that the turnover was less than four times of the stock, he has enhanced it. The figures are not exactly four times, but they are approximately so and the Judge (Revisions) has indeed erred on the side of leniency.
8. Having thug recorded our conclusions, we now turn to the questions :
Question No. (1) is answered by saying that on the facts and in the circumstances of the case, the survey report dated 9th May, 1961, was not relevant for the years other than 1961-62.
9. So far as question No. (2) is concerned, we answer it by saying that the suppression detected in the year 1961-62 could not by itself justify an inference that the assessee must have suppressed the sale in other years, but coupled with other circumstances of the case, the suppression detected in the year 1961-62 was relevant while making assessment for the remaining years.
10. Question No. (3) is answered by saying that there was material for rejecting the assessee's account books for the years other than 1961-62.
11. The assessee shall pay the costs to the Commissioner which we assess at Rs. 100 There will be one set of cost only.