High Court overturns order on local vs. inter-state sales; emphasizes sales estimation flaws. Tribunal affirms decision.

The High Court set aside the order treating local sales as inter-state sales due to lack of proof of goods movement and incorrect assessment based on one day's sales. The court emphasized that estimating sales based on one day is invalid, considering factors like festivals and calamities affecting sales variations. The Tribunal's decision dismissing the tax case was affirmed, directing the petitioner to respond to the show cause notice within 15 days. The respondent was instructed to conduct a personal hearing and make appropriate decisions based on objections and laws, with no costs awarded.

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Issues:
Challenge to order treating local sales as inter-state sales without proof of movement of goods; Incorrect assessment based on one day sale; Failure to reply to show cause notice.

Analysis:
The petitioner challenged an order by the respondent proposing to treat local sales as inter-state sales due to lack of furnished sale bills. The petitioner argued that there was no proof of inter-state movement of goods, and the respondent wrongly assessed inter-state sales for six months based on a single day's sales, which is prohibited by law. The Assessing Officer found the petitioner's business closed but still assessed a substantial tax amount, which the petitioner contended was incorrect. Reference was made to a Division Bench judgment stating that estimating sales based on one day is not a valid method. The Additional Government Pleader admitted that fixing sales for six months based on one day's sales without basis was incorrect, but noted the petitioner's failure to respond to the show cause notice.

The Division Bench judgment emphasized that estimating sales solely based on one day is not a valid approach, as sales can vary due to different factors like auspicious or inauspicious days, festivals, and natural calamities. The Tribunal held that the assessing officer erred in estimating additions based on one day's sales. The judgment dismissed the tax case, affirming the Tribunal's decision. In light of this judgment, the High Court set aside the impugned order and allowed the writ petition. The petitioner was directed to file objections to the show cause notice within 15 days, and the respondent was instructed to provide a personal hearing and pass appropriate orders based on the objections and the law. No costs were awarded, and the connected miscellaneous petition was closed.

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