Unrecorded purchases amount to suppression of turnover, supporting best judgment assessment and penalty under sales tax law.

Admitted purchases not reflected in the books were treated as material suppression of turnover, and the best judgment assessment with enhanced tax was sustained because transactions affecting tax liability must be recorded. The Court held that the concurrent factual findings of the assessing authority, appellate authority and Tribunal disclosed no legal error and supported the Revenue's case. On the same unaccounted purchases, penalty under section 12(4) of the Karnataka Sales Tax Act, 1957 was also upheld, since the omission itself furnished the basis for penal action and the authorities' reliance on distinguishable precedents was rejected. The revision petition therefore failed.

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Issues: (i) Whether the authorities were justified in treating the unrecorded purchases as suppression of turnover and in sustaining the best judgment assessment and enhanced tax; (ii) whether the levy of penalty under section 12(4) of the Karnataka Sales Tax Act, 1957 was justified.

Issue (i): Whether the authorities were justified in treating the unrecorded purchases as suppression of turnover and in sustaining the best judgment assessment and enhanced tax.

Analysis: The records showed that the assessee had admitted that certain purchases were not reflected in the books of account. The Court treated such non-accounting as material suppression, observing that transactions affecting tax liability must find place in the books and that the department was entitled to rely on the proved omission for assessment purposes. The concurrent findings of the assessing authority, appellate authority, and Tribunal were held to be based on facts and free from legal error.

Conclusion: The finding of suppression and the best judgment assessment were upheld in favour of the Revenue.

Issue (ii): Whether the levy of penalty under section 12(4) of the Karnataka Sales Tax Act, 1957 was justified.

Analysis: Since the Court accepted the factual finding that the purchases were not accounted for in the books, the basis for penalty also survived. The cited decisions relied on by the assessee were distinguished on facts because they involved accounted transactions or materially different factual situations. On the established omission, the authorities were justified in imposing penalty.

Conclusion: The levy of penalty under section 12(4) was upheld in favour of the Revenue.

Final Conclusion: The revision petition failed because the concurrent factual findings of suppression and non-accounting of purchases justified both the enhanced assessment and the penalty.

Ratio Decidendi: Where purchases are admittedly not reflected in the books of account, the omission constitutes suppression of turnover warranting best judgment assessment and allied penalty under the sales tax law.

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