Recognised accounting method and year-specific assessment prevent rejection of books without proof of suppression.

A petty dealer's practice of counting cash at the close of business and recording daily sales after adjustments is a recognised, though crude, accounting method, and it does not by itself justify rejection of account books absent evidence of suppression or breach of section 12 of the U.P. Sales Tax Act or rule 72 of the U.P. Sales Tax Rules. Assessment under the U.P. Sales Tax Act is year-specific, so rejection of books in an earlier year does not automatically support rejection in a later assessment year; each year must be judged on its own material. The account books could therefore not be rejected on either ground.

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Issues: (i) Whether account books could be rejected merely because the dealer recorded daily sales at the end of the day after counting the cash in the till. (ii) Whether account books could be rejected for the assessment year 1967-68 because they had been rejected in the preceding year.

Issue (i): Whether account books could be rejected merely because the dealer recorded daily sales at the end of the day after counting the cash in the till.

Analysis: A petty dealer may adopt the method of counting cash at the close of business and arriving at sales after necessary adjustments. That method, though crude, is a recognised mode of account-keeping. In the absence of other circumstances showing suppression of sales, the mere adoption of that method does not justify rejection of the books. The statutory requirements under section 12 of the U.P. Sales Tax Act and rule 72 of the U.P. Sales Tax Rules were not shown to have been violated.

Conclusion: The books could not be rejected on this ground, and the finding was against the department.

Issue (ii): Whether account books could be rejected for the assessment year 1967-68 because they had been rejected in the preceding year.

Analysis: Assessment proceedings under the U.P. Sales Tax Act are year-specific, and each assessment year is a self-contained unit. Findings in an earlier year do not operate as res judicata in a later year. Rejection of books in a previous year, by itself, is therefore not a relevant basis for rejecting the books in the year under reference.

Conclusion: The books could not be rejected on this ground, and the finding was against the department.

Final Conclusion: The reference was answered in favour of the assessee, holding that the account books could not be rejected on either ground and that the assessment had to be made on the material relevant to the year in question.

Ratio Decidendi: A recognised method of accounting cannot be disapproved merely because sales are recorded at day-end after counting cash in the till, and rejection of books in an earlier assessment year does not by itself justify rejection in a subsequent year.

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