Manufacturing account compliance under sales tax rules is a material requirement; rejection of books and remand upheld.

Maintenance of a manufacturing account under rule 32(15A) of the Kerala General Sales Tax Rules, 1963 was treated as a material compliance requirement, not a technical lapse. The assessing authority had rejected the books not only for absence of the manufacturing account but also for other defects, including low turnover against stock position, limited sales days, and valuation concerns. In view of the principle that missing quantitative records can make accounts unreliable and justify best judgment assessment, the Tribunal was wrong to treat the defect as inconsequential. The revisional court set aside the Tribunal's order directing acceptance of the books and remitted the appeals for fresh disposal.

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Issues: Whether the Tribunal was justified in directing acceptance of the assessee's books of accounts despite non-maintenance of the manufacturing account required by rule 32(15A) of the Kerala General Sales Tax Rules, 1963.

Analysis: The requirement to maintain a manufacturing account was treated as a material compliance obligation, not a mere technical formality. The accounts were rejected by the assessing authority not only for non-maintenance of the manufacturing account but also for other defects such as low turnover compared with stock position, limited sales days, and valuation concerns. In the light of the binding view that absence of such quantitative records can render the accounts unreliable and justify best judgment assessment, the Tribunal was not right in treating the defect as inconsequential and in ignoring the other grounds for rejection.

Conclusion: The Tribunal's direction to accept the books of accounts was unsustainable. The revisional court set aside the Tribunal's common order and remitted the appeals for fresh disposal in accordance with law.

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