Sales tax liability date cannot stand when based on an assessment set aside and unsupported by cogent evidence.

Sales tax liability from 15 March 1966 could not be sustained because it depended entirely on a turnover figure used in an assessment order that had already been set aside and remanded for fresh disposal. Once that assessment basis ceased to operate, the foundation for fixing the liability date also fell away. The finding was further unsustainable because the appellate authority relied on an estimate despite recording paucity of evidence and no material to support it. The fixation of liability was therefore based on conjectures and surmises rather than cogent evidence, and the reference was answered in favour of the assessee.

---

---

Issues: (i) Whether liability to pay sales tax with effect from 15 March 1966 could be sustained after the assessment order for the relevant year had been set aside and remanded. (ii) Whether the fixation of liability from 15 March 1966 was based on cogent material or merely on conjectures and surmises.

Issue (i): Whether liability to pay sales tax with effect from 15 March 1966 could be sustained after the assessment order for the relevant year had been set aside and remanded.

Analysis: The date of liability had been fixed only by adopting the turnover figure of Rs. 54,000 for 1965-66. That figure was the foundation of the liability date, but the assessment order containing it had already been set aside and the matter remanded for fresh disposal after further evidence. Once the assessment was no longer operative, the basis for determining the date of liability also disappeared.

Conclusion: The liability to pay sales tax from 15 March 1966 could not be maintained.

Issue (ii): Whether the fixation of liability from 15 March 1966 was based on cogent material or merely on conjectures and surmises.

Analysis: The appellate authority relied on the earlier turnover estimate even while recording that there was paucity of evidence and no material to sustain the estimate. The finding fixing the liability date was therefore unsupported by evidence and inconsistent with the remand order directing fresh ascertainment of turnover on proper material.

Conclusion: The fixation of liability from 15 March 1966 was not based on cogent material and rested on conjectures and surmises.

Final Conclusion: The reference was answered against the revenue and in favour of the assessee because the liability date could not stand once the assessment foundation had been set aside and no reliable material supported the finding.

Ratio Decidendi: A liability date for sales tax cannot be sustained when it rests exclusively on an assessment figure that has itself been set aside and remanded, and any such finding must be supported by cogent evidence rather than conjecture.

---