Rejected accounts cannot rest solely on consignment penalty where turnover was recorded and taxed in the return.

Mere detention of a consignment and the resulting penalty under section 29A of the Kerala General Sales Tax Act, 1963 did not by itself justify rejection of accounts or an enhanced best judgment addition to the returned turnover. Where the assessee had accounted for the consignment on receipt, included the corresponding turnover in the return, and subjected it to tax, and no other irregularity, omission, or suppression was found in the books, the adverse assessment could not rest solely on the penalty related to the intercepted goods. The addition to the returned turnover was therefore held unjustified and deleted, and the revision was allowed in favour of the assessee.

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Issues: Whether the addition made to the returned turnover and the rejection of accounts were justified solely on the basis of the penalty imposed under section 29A of the Kerala General Sales Tax Act, 1963, in respect of the detained consignment.

Analysis: The value of the consignment had been accounted for by the assessee on receipt and the corresponding turnover had been included in the return and subjected to tax. No other irregularity, omission, or suppression was found in the books of account. The only basis for the adverse assessment was the penalty imposed in relation to the intercepted goods. In the absence of any further defect in the accounts, the mere detention of the consignment and the consequential penalty could not justify rejection of accounts or an enhanced best judgment addition to the returned turnover.

Conclusion: The addition to the returned turnover was not justified and had to be deleted. The revision was allowed in favour of the assessee.

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