2013 (7) TMI 557 - HC - VAT and Sales Tax

Court Dismisses Revisions on Tax Assessments; Emphasizes Importance of Accurate Account Books

The revisions concerning the assessment year 1995-96 under the U.P. Trade Tax Act and the Central Sales Tax Act were dismissed by the court. The court ... Amount of taxable turnover - whether reduction made under U.P. Act justified or not - Held that:- assessment made by the assessing authority to the best of its judgment ignoring the books of accounts cannot be faulted with and since the first appellate authority had reduced the taxable turnover without assigning any cogent reasons the tribunal has rightly reverse the same - t was not the case of the assessee that he had been maintaining two separate books of accounts one for the U.P. Trade Tax Act and other for the Central Sales Tax Act, therefore, once the accounts books for valid reasons have been rejected for the purpose of levy of tax under the U.P. Trade Tax Act and the said rejection is not disputed it naturally means that the accounts relating to turnover under the Central Sales Tax Act are also not acceptable - assessee is unable to show what further reduction would have been possible in the taxable turnover - no question of law worth consideration arises - Decided in favour of Revenue. Issues:Assessment under U.P. Trade Tax Act and Central Sales Tax Act for the year 1995-96.Analysis:The judgment pertains to two revisions concerning the assessment year 1995-96 under the U.P. Trade Tax Act and the Central Sales Tax Act. The assessing authority had rejected the account books and determined the taxable turnover to the best of its judgment. Upon appeal by the assessee, the taxable turnover was reduced under both acts. However, the Tribunal upheld the reduction under the Central Act but disagreed with the reduction under the U.P. Act, leading to the filing of these revisions.In the assessment under the U.P. Act, the counsel for the revisionist argued that the difference in the account books amounted to a specific sum that should have been added to the taxable turnover. However, the court held that once the account books are rejected due to missing transactions, the disclosed turnover cannot be used for assessment purposes. Therefore, the assessing authority's judgment to ignore the books of accounts was deemed appropriate, especially since the first appellate authority had reduced the turnover without valid reasons.Regarding the assessment under the Central Act, the counsel contended that there was no basis for rejecting the account books. The court pointed out that since the same set of account books were rejected for the U.P. Trade Tax Act, they could not be considered acceptable for the Central Sales Tax Act either. Despite a significant reduction in the taxable turnover under the Central Act, the counsel failed to demonstrate any further possible reduction.Ultimately, the court concluded that both revisions were based on findings of fact without any substantial legal questions, leading to their dismissal due to lack of merit. The judgment highlights the importance of maintaining accurate account books and the consequences of their rejection in tax assessments under different acts.