Annual stock account omission alone cannot justify rejecting books or enhancing turnover without positive evidence of inaccuracy.

Non-maintenance of the annual stock account under the Orissa Sales Tax Act does not, by itself, justify rejection of the books of account or enhancement of turnover by best judgment assessment. The stock account is intended to help verify the correctness of returns and accounts, but its absence is not conclusive proof that the books are false or incomplete. The assessing authority must record positive reasons showing that the accounts do not reflect the true position. Where purchase and sales registers are maintained in the ordinary course, are verifiable, and no suppression is detected, the books and returned turnover cannot be discarded merely for want of the annual stock account.

---

---

Issues: Whether non-maintenance of the annual stock account required by section 15(2) of the Orissa Sales Tax Act, 1947, by itself justified rejection of the books of account and enhancement of turnover by best judgment assessment.

Analysis: Section 15(1) requires every registered dealer to keep a true account of goods bought and sold and the books of account relating to business, while section 15(2) adds the obligation to maintain an annual stock account showing opening and closing balances. Section 12 governs assessment on returns and permits best judgment assessment where the assessing authority is not satisfied that the returns are correct and complete. The requirement of an annual stock account is meant to aid verification of correctness of accounts and returns, but its absence does not automatically establish that the accounts are false or incomplete. A best judgment assessment does not necessarily require enhancement of turnover, and the assessing authority must record positive reasons showing that the books do not reflect the true position. On the facts, the lower authorities had found that the assessee maintained purchase and sales registers in the ordinary course of business, the entries were verifiable, and no suppression of purchases or sales was detected.

Conclusion: Non-maintenance of the annual stock account by itself is not a sufficient ground to discard the books of account or returned turnover, and the issue whether the accounts are true and correct is primarily one of fact. The reference did not give rise to a question of law on the facts found, and the answer is against the Revenue.

Final Conclusion: The reference was answered in favour of the assessee, and the matter stood disposed of without costs.

Ratio Decidendi: Absence of the statutory annual stock account, by itself, does not justify rejection of books of account or best judgment enhancement unless the assessing authority records positive material showing that the accounts do not disclose the true and correct position.

---