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Issues: Whether the turnover estimate made on the basis of the income-tax search materials and assessment was excessive and whether the Tribunal was required to consider the reduction in turnover made by the Income-tax Appellate Tribunal while re-determining the assessee's turnover.
Analysis: The assessment for the year 1971-72 was based on alleged suppression, and the turnover was estimated at a very high level with reference to the search conducted under section 132 of the Income-tax Act, 1961. The Tribunal had reduced the turnover in the income-tax proceedings, and that aspect was relevant to the determination of the estimated turnover in the sales tax proceedings. The existing estimation was found to be excessive, and the Tribunal ought to have considered the effect of the appellate income-tax order before fixing the turnover.
Conclusion: The order of the Tribunal was set aside and the matter was remitted to the Tribunal for fresh consideration in accordance with the directions issued.
Final Conclusion: The assessee succeeded in getting the assessment order interfered with, and the dispute was sent back for reconsideration on the turnover estimation issue.
Ratio Decidendi: Where turnover is estimated on the basis of suppression and related income-tax materials, relevant findings in the connected income-tax appellate proceedings must be considered if they bear on the reliability of the estimate.
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