Suo motu revision and best judgment assessment upheld where turnover challenge fell outside scope and account defects justified estimation.

In a suo motu revision under sales tax law, objections could not be raised against the first appellate authority's finding on annual sales turnover when that issue was outside the scope of the revision and no second appeal had been filed. The Tribunal also noted that rejection of accounts was justified by defects such as suppression of daily sales, absence of bills and stock records, and other surrounding circumstances, supporting a best judgment assessment. The estimation of annual turnover and the revised determination under section 7-A were therefore upheld as based on relevant material and not shown to be arbitrary.

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Issues: (i) Whether, in a suo motu revision, the assessee could challenge the finding of the first appellate authority on annual sales turnover when that point was not the subject of revision or a second appeal. (ii) Whether the estimation of annual sales turnover and the revised turnover under section 7-A was justified on the facts.

Issue (i): Whether, in a suo motu revision, the assessee could challenge the finding of the first appellate authority on annual sales turnover when that point was not the subject of revision or a second appeal.

Analysis: The revision was confined to the turnover component brought to tax under section 7-A. The assessee had not preferred a second appeal on the annual sales turnover, and the revisional authority was not required to reopen matters outside the scope of the suo motu revision. The challenge to the annual turnover finding was therefore outside the permissible range of arguments.

Conclusion: The objection to the annual sales turnover was not entertainable in the suo motu revision.

Issue (ii): Whether the estimation of annual sales turnover and the revised turnover under section 7-A was justified on the facts.

Analysis: The account defects, suppression of daily sales, absence of supporting bills and stock records, and the hotel's location near the bus stand supported rejection of the accounts and a best judgment assessment. The revisional authority also applied its mind independently while restricting some items and retaining estimation for the relevant purchases. The assessment and revisional estimates were found to be based on valid reasons and were not shown to be arbitrary.

Conclusion: The estimation of turnover and the revisional determination under section 7-A were upheld.

Final Conclusion: The challenge to the revisional order failed, and the revenue's assessment was sustained in full.

Ratio Decidendi: In a suo motu revision under the sales tax law, only matters actually covered by the revision can be canvassed, and a best judgment estimate based on proved defects in accounts and surrounding circumstances will not be interfered with if it is supported by relevant material.

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