Statutory compounding for arrack dealers controls turnover estimation, and rental alone cannot justify an arbitrary multiplier.

For arrack dealers, turnover cannot be estimated by merely multiplying rental amounts unless the statutory compounding method under section 7(14) of the Kerala General Sales Tax Act, 1963 is followed. Rental by itself was not treated as a reliable basis for determining turnover, and an arbitrary multiplier could not replace the statutory conditions governing estimation. The assessee's claim that it had exercised the option under section 7(14) was also not considered by the Tribunal. The turnover estimate was therefore set aside and the matter remitted for consideration of the statutory compounding claim.

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Issues: Whether the turnover of an arrack dealer could be estimated by multiplying the rental amount without applying the statutory compounding provision, and whether the assessee's claimed option under the compounding scheme required consideration.

Analysis: The assessment related to an arrack dealer for the relevant year. The accounts were rejected and best judgment assessment was made by estimating turnover at a multiple of the rental amount. The appellate authority accepted rejection of accounts but reduced the estimate. In revision, the Court held that if the department sought to fix turnover on the basis of rental in the case of arrack sales, it could be done only in the manner contemplated by section 7(14) of the Kerala General Sales Tax Act, 1963. Rental by itself was not a safe indicator of turnover, and a mere multiplication of rental without applying the statutory conditions was not permissible. The assessee's contention that it had opted under section 7(14) had not been considered by the Tribunal.

Conclusion: The estimate of turnover based on multiplication of rental was not sustainable, and the matter was remitted to the Tribunal for consideration of the assessee's claim under section 7(14) of the Kerala General Sales Tax Act, 1963.

Ratio Decidendi: Where the statute provides a specific compounding method for arrack dealers, turnover cannot be estimated merely by applying an arbitrary multiplier to rental amounts, and the statutory option and conditions must be considered.

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