R.N. Misra, C.J.
1. At the assessee's instance this Court by order dated 6th February, 1979, directed the Additional Sales Tax Tribunal to state a case and refer the following question for opinion of the Court:
'Whether, on the facts and circumstances of the case, there is justification to hold that the daily sales turnover of the assessee should be determined at Rs. 480 as done by the Tribunal ?'
2. The assessee is a registered dealer carrying on confectionery business at Bhubaneswar. For the assessment period 1973-74, the assessee disclosed sales at Rs. 58,387.65 and for the following year at Rs. 1,17,423.25. The assessing officer rejected these book figures as untrue on the finding that the assessee was not maintaining his account of sales and purchases properly. The assessing officer enhanced the gross turnover to Rs. 1,42,500 for the first year and to Rs. 2,55,500 for the second year by resorting to best of judgment. The assessee in first appeal disputed the quantum by branding it as arbitrary, excessive and without any nexus to the record. In second appeal, the Tribunal reduced the daily turnover by determining it at Rs. 220 for 1973-74 and at Rs. 480 for 350 days of 1974-75.
3. There was no dispute to the enhancement in 1973-74. There is a categorical finding of fact that the assessee had, during the early part of the year in question, expanded the business by investing almost double of the earlier investment. Amenities were increased and refrigerator was provided. The assessing officer, therefore, estimated that the return received by the assessee from the extra investment was also commensurate. The earlier daily figure of Rs. 220 was, therefore, enhanced to Rs. 440. Over and above this, there was a further addition of ten per cent on the principle that every year there must be an increase of ten per cent in the turnover on the basis of the previous year's turnover. To consider that there has been a commensurate rise in the return depending upon the investment is one of fact. In a best judgment assessment there would be some amount of conjecture and arbitrariness, but where it is co-related to a sound reason, we do not think we can interfere with the finding. There does not, however, seem to be any justification for the addition of ten per cent nor can there be any rule depending upon any commercial experience that there would be a steady increase of ten per cent in the annual turnover on the basis of the previous turnover. Once the daily turnover is enhanced by one hundred per cent on the basis that there has been a return for the investment, there is no scope for the further addition of ten per cent. That would be without any justification. We would accordingly answer the question by saying that on the facts the determination of the daily turnover at Rs. 480 is not justified and the same has to be scaled down and it is open to the authorities under the Act to proceed on the estimated basis of daily turnover at Rs. 440 only.
There would be no order for costs.
B.K. Behera, J.
I agree with my Lord, the Chief Justice.