Exemption claims cannot be rejected for technical proof defects when other reliable evidence supports the assessee's case.

Rule 36(1) was treated as governing the evidence needed to support an exemption claim, but not as excluding all other reliable material. The assessing authority could not reject exemption solely because the prescribed cash or credit memos were not produced in time or did not strictly conform to the Rule. Assessment had to be based on a reasoned judgment, considering the nature of the business, other credible evidence, and surrounding circumstances before treating turnover as taxable. The exemption claim and assessment were therefore required to be re-examined on the full evidentiary record.

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Issues: Whether cash or credit memo volumes not strictly complying with Rule 36(1) are the only permissible evidence for claiming exemption, and whether the assessing authority must consider other reliable evidence while exercising judgment in assessment.

Analysis: The Rule was treated as prescribing the evidence that would entitle an assessee to claim exemption, but not as excluding all other evidence. It was held that the assessing authority is not bound to reject the claim merely because the prescribed memos were not produced in time or did not strictly conform to the Rule. The assessment provisions were read as requiring the authority to exercise judgment and consider the nature of the business, the other reliable evidence produced, and relevant surrounding circumstances before treating the gross turnover as taxable.

Conclusion: The exemption claim could not be rejected solely for non-compliance with Rule 36(1), and the authority was required to consider other evidence; the matter was therefore remanded for fresh examination.

Final Conclusion: The assessee obtained a remand for reconsideration of the exemption claim and the assessment on the basis of all relevant evidence.

Ratio Decidendi: A procedural requirement for proof of exemption does not bar the assessing authority from relying on other credible evidence, and assessment must be made by a reasoned exercise of judgment rather than by automatic rejection for technical non-compliance.

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