Rejection of account books needs positive material of suppression; low disclosed turnover alone is not enough.

Regularly maintained account books could not be rejected merely because the disclosed turnover appeared low. The Court held that a fall in turnover, without positive and concrete material showing suppression or inaccuracy of sales, was insufficient to justify rejection of the books or a best judgment assessment. It further noted that revisional jurisdiction under the U.P. Sales Tax Act was co-extensive with appellate jurisdiction and could extend to questions of fact and law. On the facts, the rejection of the account books was not justified, and the reference was answered in favour of the assessee.

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Issues: Whether the assessee's account books could be rejected merely because the declared turnover appeared inadequate, in the absence of positive material showing suppression of sales.

Analysis: The reference arose under section 11(4) of the U.P. Sales Tax Act. The Court held that the revisional jurisdiction under section 10 of the Act is co-extensive with appellate jurisdiction and extends to all questions of fact and law raised before it. On the merits, it found that the only reason for rejecting the books was the perceived inadequacy of turnover. That circumstance, by itself, was insufficient. Before rejecting regularly maintained accounts, the assessing authority had to bring on record positive and concrete material indicating understatement of turnover; a mere fall in turnover could arise from several causes and did not automatically justify rejection of the books.

Conclusion: The rejection of the account books was not justified, and the first question was answered in the negative, in favour of the assessee.

Final Conclusion: The reference was answered by holding that the assessee's books could not be rejected on the sole ground of inadequate turnover, and the second question was left unanswered as unnecessary.

Ratio Decidendi: Account books maintained in regular course cannot be rejected merely because the disclosed turnover appears low; some positive and concrete material showing suppression or inaccuracy must exist before a best judgment assessment can be sustained.

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