Absence of Form XXXI alone does not justify rejection of accounts or tax levy on seized raw material.

Mere absence of Form XXXI, without material showing an intention to evade tax, did not justify rejection of the assessee's accounts where the seized goods were raw material and the books reflected tax payment on manufactured goods. The rejection of accounts was therefore set aside. On the same facts, the turnover estimate could not be sustained because the seizure related only to raw material and the basis for taxing it was absent. The estimate of turnover was accordingly held unjustified, and the revision succeeded with the tribunal's order set aside.

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Issues: (i) Whether the rejection of the accounts book was justified. (ii) Whether the estimate of turnover was justified.

Issue (i): Whether the rejection of the accounts book was justified.

Analysis: The assessee's books showed tax payment on manufactured goods, and the seized goods were raw material. Mere apprehension of raw material without form XXXI did not establish an intention to evade tax or justify adverse inference against the accounts.

Conclusion: The rejection of the accounts book was not justified and was set aside.

Issue (ii): Whether the estimate of turnover was justified.

Analysis: Since the seizure related only to raw material and not to taxable manufactured goods, the foundation for imposing tax on the raw material and sustaining the turnover estimate was absent. The line of decisions relied upon supported the view that absence of form XXXI by itself did not warrant such levy.

Conclusion: The estimate of turnover was not justified and could not be sustained.

Final Conclusion: The revision succeeded, and the Tribunal's order was set aside because no tax liability could be fastened on the seized raw material on the facts found.

Ratio Decidendi: Mere absence of form XXXI, without material showing an intention to evade tax, does not justify rejection of accounts or levy of tax on raw material.

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