Suppressed turnover can be estimated for the full year where inspection reveals missing bills and improper accounts.

Suppressed turnover may be estimated for the full year when an inspection and surrounding material show material understatement of sales and purchases. Here, cash in hand, missing supporting bills, and improper account maintenance supported the conclusion that the returned turnover was materially lower than the actual turnover. On that evidence, the authorities were justified in estimating suppressed sales and purchases and levying sales tax on the suppressed turnover. The High Court sustained the finding of suppression and upheld the estimate as supported by relevant material.

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Issues: Whether the authorities were justified in holding that the assessee had suppressed turnover and in estimating suppressed sales and purchases on the basis of the inspection and surrounding material.

Analysis: The turnover returned by the assessee was found to be materially lower than the actual turnover. The inspection revealed cash in hand, absence of supporting bills, and improper maintenance of accounts. On that material, the authorities estimated purchases and sales for the year and levied sales tax on the suppressed turnover. The findings were supported by relevant evidence. The principle that suppressed turnover can be estimated for the whole year on the basis of an inspection where suppression is detected was applied, and the additional material on record reinforced the estimate.

Conclusion: The finding of suppression of turnover was upheld and the estimate of suppressed sales and purchases was sustained against the assessee.

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