Negative fact burden and best judgment assessment governed turnover estimation after book rejection.

Where an assessee denies the existence of U.P. sales, the matter involves proof of a negative fact and the burden shifts to the Revenue to disprove the denial; mere rejection of books was insufficient to presume U.P. sales without supporting material, so the estimated U.P. turnover was deleted. After rejection of the books of account, however, the assessment could proceed on best judgment, and the absence of a specific contract for inter-State movement did not prevent estimation of Central sales on available material, so the enhanced Central turnover was upheld.

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Issues: (i) Whether, in the absence of manufactured account books and in view of the assessee's denial, the turnover of U.P. sales could be estimated under section 12-A of the U.P. Sales Tax Act, 1948. (ii) Whether the Central sales turnover could be enhanced on a best judgment basis after rejection of the books of account.

Issue (i): Whether, in the absence of manufactured account books and in view of the assessee's denial, the turnover of U.P. sales could be estimated under section 12-A of the U.P. Sales Tax Act, 1948.

Analysis: Section 12-A places the initial burden on the assessee in respect of facts specially within its knowledge. However, where the assessee denies the existence of U.P. sales, the matter concerns proof of a negative fact. In such a situation, once the denial is made, the burden shifts to the Revenue to disprove the contention. Mere rejection of the books did not justify presumption of U.P. sales in the absence of supporting material.

Conclusion: The estimate of U.P. sales was unsustainable and was deleted in favour of the assessee.

Issue (ii): Whether the Central sales turnover could be enhanced on a best judgment basis after rejection of the books of account.

Analysis: Once the book version was rejected, the assessment had to proceed on best judgment. For Central sales, the absence of a specific contract causing inter-State movement did not prevent estimation where the accounts were not accepted. The Tribunal's estimate was therefore based on the permissible method of assessment and disclosed no infirmity.

Conclusion: The enhancement of Central sales turnover was upheld against the assessee.

Final Conclusion: The revision succeeded only in relation to U.P. sales, while the challenge to the Central sales assessment failed.

Ratio Decidendi: A denial by the assessee of a fact specially within its knowledge can shift the burden to the Revenue when the fact is negative in nature, but once books are rejected, a best judgment estimate of taxable turnover may validly be made on the available material.

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