Non-issuance of cash memos can reject accounts, yet disclosed turnover may still be accepted on reliable records.

Failure to issue cash memos, where statutorily required, can justify rejection of a dealer's books of account under the U.P. Sales Tax Act. However, rejection of accounts does not automatically compel rejection of the disclosed taxable turnover. If the accounts are otherwise free from infirmity, the turnover shows a consistent upward trend, and prior years' accounts were accepted, the disclosed turnover may still be accepted as reliable. The legal position stated is that non-issuance of cash memos supports rejection of accounts, but the turnover assessment must still be tested on the surrounding record.

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Issues: Whether non-issuance of cash memos was a sufficient ground to reject the dealer's accounts under the Sales Tax Act, and whether the Tribunal was justified in accepting the disclosed taxable turnover despite that default.

Analysis: Non-issuance of cash memos, in view of the statutory requirement under section 8-A(4) of the U.P. Sales Tax Act, was a legally sufficient ground to reject the books of account. However, rejection of accounts did not automatically require rejection of the entire disclosed taxable turnover. The surrounding circumstances showed that the assessee's accounts suffered from no other infirmity, the turnover had shown a progressive increase, and the accounts had been accepted in the preceding years. In those circumstances, the Tribunal's conclusion accepting the disclosed turnover could not be characterised as arbitrary.

Conclusion: The Tribunal was wrong in law in holding that non-issuance of cash memos could not justify rejection of accounts, but its acceptance of the disclosed taxable turnover was upheld.

Final Conclusion: The revision succeeded only to the limited extent of the legal position on rejection of accounts, while the substantive acceptance of the dealer's disclosed turnover remained undisturbed.

Ratio Decidendi: Failure to issue cash memos as required by the statute can justify rejection of accounts, but disclosed turnover may still be accepted if the record otherwise supports its reliability.

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