Turnover estimation in arrack trade fails absent proof of suppression, unaccounted purchases, or taxable sales beyond the books.

Rejecting an estimate of arrack turnover requires primary material showing suppression, unaccounted purchases, or taxable sales beyond the accounts. Here, the assessee's purchases were shown as intra-State and tax-paid, inspections revealed only minor shortages with no excess stock, and no evidence established outside-State purchases or undisclosed transactions. On that record, mere reference to a higher returned turnover was insufficient to justify rejecting the books or estimating taxable turnover. The Tribunal's view that the recorded turnover represented second sales and that estimation could not rest on presumption was upheld, and the revision failed.

---

---

Issues: Whether the assessing authority was justified in rejecting the assessee's accounts and estimating taxable turnover of arrack on the basis of the disclosed sale value, and whether the Tribunal was right in directing deletion of the estimate and treating the entire turnover as second sales.

Analysis: The material on record showed that the assessee was a dealer in arrack, the commodity was taxable at the point of first sale inside the State, and the purchases were shown as having been made from within the State after payment of sales tax. The inspections disclosed only small shortages, no excess stock, and no material indicating unaccounted transactions. The authorities had not established any suppression of purchases or any purchase from outside the State. In those circumstances, mere reliance on the higher turnover returned by the assessee, without primary facts proving unaccounted purchases or taxable sales beyond the accounted purchases, was insufficient to sustain an estimate of turnover. The Tribunal's finding that estimation could not rest on presumption and that the turnover as per accounts represented second sales was based on the record.

Conclusion: The rejection of the Tribunal's view was not warranted, and the estimate of taxable turnover could not be sustained. The revision was rightly rejected in favour of the assessee.

---