Stock register non-maintenance can justify rejection of accounts and require best judgment assessment of turnover.

Non-maintenance of the stock register required under the Uttar Pradesh Sales Tax Act rendered the assessee's accounts unreliable because quantitative verification of raw materials and finished goods could not be properly made; the account books were therefore liable to rejection. Once rejected, the disclosed turnover could not be accepted unchanged, and the assessing authority was required to determine turnover on a best judgment basis using the available material. The High Court's contrary view was set aside, and the estimated turnover accepted in appeal was restored.

---

---

Issues: (i) whether non-maintenance of the stock register required by section 12(2) of the Uttar Pradesh Sales Tax Act, 1948 rendered the assessee's account books liable to rejection; (ii) whether, after such rejection, the disclosed turnover could still be accepted without fresh estimation on best judgment basis.

Issue (i): whether non-maintenance of the stock register required by section 12(2) of the Uttar Pradesh Sales Tax Act, 1948 rendered the assessee's account books liable to rejection.

Analysis: The statutory requirement to maintain stock books in respect of raw materials and products at every stage of production is intended to enable verification of accounts by quantitative tally. Failure to maintain such records makes the books unreliable or their particulars incapable of proper verification.

Conclusion: The account books were liable to be rejected.

Issue (ii): whether, after such rejection, the disclosed turnover could still be accepted without fresh estimation on best judgment basis.

Analysis: Once the account books are rejected, the turnover must ordinarily be determined by the assessing authority to the best of its judgment, along with other materials on record. A defect in non-maintenance of the stock register cannot be treated as merely technical so as to preserve the disclosed turnover without fresh assessment.

Conclusion: The disclosed turnover could not be accepted as such and fresh estimation was required.

Final Conclusion: The High Court's view was set aside and the estimated turnover as upheld in appeal was restored.

Ratio Decidendi: Where the statutory stock records are not maintained and the account books are thereby rendered unreliable, rejection of accounts ordinarily necessitates determination of turnover by best judgment assessment.

---