Suppressed sales evidence from seized slip upheld, with restored turnover and consequential tax liabilities sustained.

The Madras HC upheld the revisional authority's restoration of turnover linked to Slip No. 3, finding that the seized slip contained calculations of price, tax and surcharge indicating suppressed sales rather than mere rough notes. The court accepted the partner's statement because it was recorded, read over and acknowledged, and rejected the later plea of nervous disorder and ill health as an afterthought. The appellate authority had erred in deleting the addition, so the restored turnover and consequential tax liabilities, including surcharge and additional sales tax, were sustained.

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Issues: Whether the deletion of the turnover relatable to Slip No. 3 was justified, or whether the revisional authority was right in restoring the suppressed sales turnover and consequential tax liabilities.

Analysis: The assessment and the first appellate order were examined together with the seized slip and the partner's statement. The slip was found to contain calculations relating to price, tax and surcharge, which supported the inference that it represented suppressed sales rather than mere jottings. The plea of nervous disorder and ill health was rejected as an afterthought, since the statement had been recorded, read over and acknowledged, and no timely rebuttal was made. The revisional authority was therefore justified in holding that the appellate authority had erred in deleting the addition relating to Slip No. 3.

Conclusion: The restoration of the turnover of Rs. 1,92,773/- and the consequential tax, surcharge and additional sales tax were upheld.

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