Unreliable account books justified estimated turnover and gross profit, while a reversed precedent could not support the assessee's claim.

Where account books were unsupported by classified purchase accounts or other tangible material, the authorities were justified in rejecting the returns and estimating turnover and gross profit with reference to the nature of retail trade, prior accepted figures, and the tax burden on the goods dealt in. The assessee's reliance on New Swastik Flour Mills also failed because that decision had already been reversed by the Supreme Court in Rajasthan Roller Flour Mills Association v. State of Rajasthan, so the precedent could not support the claim. The assessment orders were therefore sustained.

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Issues: (i) Whether the rejection of the account books and the consequential estimation of turnover and gross profit were justified. (ii) Whether the contention based on the decision in New Swastik Flour Mills survived in view of the later Supreme Court ruling.

Issue (i): Whether the rejection of the account books and the consequential estimation of turnover and gross profit were justified.

Analysis: The authorities found that no classified purchase accounts or other tangible material were available to accept the returns filed by the assessee. The estimated turnover and gross profit rates were adopted having regard to the nature of the retail trade, the figures accepted for the previous year, and the tax burden borne on the goods dealt in. In the absence of reliable material, the estimation could not be said to be improper.

Conclusion: The rejection of the accounts and the estimation of turnover and gross profit were upheld.

Issue (ii): Whether the contention based on the decision in New Swastik Flour Mills survived in view of the later Supreme Court ruling.

Analysis: The earlier decision relied upon by the assessee had been reversed by the Supreme Court in Rajasthan Roller Flour Mills Association v. State of Rajasthan, and therefore the argument founded on that precedent could not be accepted.

Conclusion: The contention based on New Swastik Flour Mills was rejected.

Final Conclusion: The petitions failed on all material grounds and the assessment orders were sustained.

Ratio Decidendi: Where the account books are unreliable and no tangible material supports the returned figures, the assessing authority may sustain an estimated turnover and gross profit determination, and a precedent reversed by the Supreme Court cannot support the assessee's claim.

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