Excess stock burden of proof: belated, inconsistent explanation failed to defeat penalty for incomplete accounts.

Where excess stock is found in the assessee's premises, the initial burden lies on the assessee to explain that the goods do not belong to it and to rebut the inference of undisclosed stock. A later explanation that is inconsistent with the contemporaneous record, including the absence of any claim at inspection and the failure to issue suspense slips, was treated as an afterthought and found insufficient on a balance of probabilities. The penalty for non-maintenance of true and complete accounts was therefore upheld.

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Issues: Whether the assessee had discharged the burden of explaining excess stock found during inspection so as to avoid penalty for non-maintenance of true and complete accounts under the sales tax law.

Analysis: The inspection revealed a substantial excess of raw rubber not reflected in the account books. In proceedings for penalty, the initial onus lay on the assessee to show that the stock did not belong to it. The explanation offered through a later letter and supporting affidavits was found inconsistent with the contemporaneous record, including the absence of a claim at the time of inspection, the issuance of purchase bills only later, and the unexplained failure to issue suspense slips for such a large quantity. On the materials on record, the explanation was treated as an afterthought and the assessee was held not to have established the claim on a balance of probabilities.

Conclusion: The assessee failed to discharge the burden of proof, and the penalty for non-maintenance of true and complete accounts was upheld.

Ratio Decidendi: Where excess stock is found in the assessee's premises, the burden rests on the assessee to prove that the goods do not belong to it, and a belated, inconsistent explanation unsupported by contemporaneous records is insufficient to displace that burden.

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