1. The assessment challenged in this case relates to the assessment year 1960-61. The assessee, Bhaskar Camphor Works, returned a taxable turnover of Rs. 1,73,562.25 for the year 1960-61. But the assessing officer did not accept the turnover returned as correct but proceeded to add a turnover of Rs. 59,000, as representing turnover of suppressed sales of camphor, to the taxable turnover returned, on the ground that certain quantities of camphor totalling 1642 lbs. were seized by the Central excise authorities from three premises belonging to the assessee. The camphor so seized by the Central excise authorities was held to belong to the partnership (assessee) and was valued at Rs. 29,500; and the assessing officer added another Rs. 29,500 as undetected purchase suppressions. In all, the assessing officer added to the taxable turnover a sum of Rs. 59,000 and subjected the gross amount to tax at six per cent, on the ground that the turnover represented first sales of camphor within the State.
2. The assessment thus made by the assessing officer was upheld by the Appellate Assistant Commissioner. Before the Appellate Assistant Commissioner, the assessee made a request for postponing the disposal of the appeal so as to enable the assessee to file the final order of adjudication passed by the Central excise authorities. But the Appellate Assistant Commissioner was not inclined to grant the assessee's request. However, before the Tribunal, the final order of the Central excise authorities was produced. That order showed that quantities of camphor recovered from two of the premises had been shown to be not contraband goods and that the quantity seized from the third premises belonging to Manickam Chetty alone represented contraband items. The assessee contended before the Tribunal that the third premises from which substantial quantity of camphor was seized belonged to Manickam Chetty and not to the firm as such and that, therefore, the quantity should not be taken as belonging to the assessee-firm. The Tribunal did not accept the assessee's contention, but proceeded to treat the quantity of camphor found in the third premises also as belonging to the assessee-firm, in view of the fact that Manickam Chetty was a partner of the assessee-firm and he is no other than the father of the other two partners.
3. We are not in a position to say that the Tribunal has erred in inferring that the quantity of camphor found in all the three premises by the Central excise authorities belonged to the assessee-firm. The question whether the third premises from which the camphor was seized belonged to the assessee-firm or whether it belonged to Manickam Chetty exclusively is one of fact and all the three authorities below have concurrently held that the camphor seized from the three premises belonged to the assessee-firm and not to Manickam Chetty exclusively.
4. The learned counsel for the assessee contends that as per the terms of the partnership deed, Manickam Chetty was at liberty to carry on his individual business and that, therefore, the camphor seized by the Central excise authorities should be treated as his separate property. Apart from the term in the partnership deed, no material has been placed to show that Manickam Chetty had a business of his own in camphor. Therefore, the stocks of camphor found in the three premises should be taken to be the stocks of the assessee-firm.
5. The learned counsel then says that the estimate of suppressed turnover made in this case is somewhat excessive and that in the interests of justice it must be restricted to the actual value of the camphor found in the three premises, i.e., Rs. 29,500. In this case, we find that the assessing authority proceeded to add 100 per cent, to the value of camphor that was seized and he ascertained the total suppression at Rs. 59,000. But the Tribunal would not proceed on that basis, but it adopted a different basis for finding out the value of the suppressed transactions in camphor. According to the Tribunal, the probable suppression can be taken as 25 per cent. of the turnover returned by the assessee. We are of the view that the Tribunal was not justified in adopting an entirely different basis without having any nexus to the suppressions found. In this case, it has not been shown that there has been any other consignment of camphor suppressed, either before or later. Therefore, we feel that the actual turnover found suppressed can be taken to be the total extent of suppression.
6. On the facts and circumstances of this case, in modification of the amount of suppression as ascertained by the Tribunal, we take the suppressions of the assessee as Rs. 29,500, which is the value of the camphor actually seized from the three premises by the Central excise authorities. Therefore, we partly allow the tax case and restrict the addition to Rs. 29,500 towards suppression and delete the rest of the addition towards suppressed transactions. In other respects, the Tribunal's order will stand. No costs.