Book rejection needs defective accounts or proof of under-recorded turnover, not mere breach of bookkeeping rules.

Non-compliance with rule 72(2) of the U.P. Sales Tax Rules does not automatically justify rejection of account books or enhancement of turnover. The rule was treated as requiring certain information to be maintained in the books, not as creating a per se consequence for every technical lapse. Where the accounts are otherwise regular, verifiable, and supported by reasonable recorded sales, omission to keep a manufacturing account in the precise prescribed form is insufficient by itself to trigger best judgment assessment. Rejection of accounts requires defective books or material showing under-recording of turnover.

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Issues: Whether non-compliance with rule 72(2) of the U.P. Sales Tax Rules, by itself, justified rejection of the assessee's account books and enhancement of turnover.

Analysis: The statutory scheme was held to require ascertainment of turnover from accounts maintained in the ordinary course of business and according to a recognised system of account keeping. Rule 72 was treated as prescribing the information to be available in the books, not as creating an automatic consequence of rejection and best judgment assessment on every technical lapse. Where the accounts were found otherwise regular, verifiable, and the recorded sales reasonable, mere omission to maintain a manufacturing account in the precise form contemplated by rule 72(2) did not justify rejection of the books or arbitrary enhancement of turnover.

Conclusion: Non-compliance with rule 72(2), standing alone and in the absence of any defect in the accounts or material showing under-recording of turnover, did not warrant rejection of the books or enhancement of turnover.

Final Conclusion: The reference was answered against the department and in favour of the assessee because the enhancement of turnover had no material basis once the accounts were found otherwise proper.

Ratio Decidendi: Mere breach of a bookkeeping requirement will not justify rejection of accounts or best judgment assessment unless the accounts are defective or there is material showing that the turnover has not been correctly recorded.

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