1981 (8) TMI 246 - HC - VAT and Sales Tax

High Court upholds assessment, rejects account-books for 1972-73; accepts disclosed turnover.

The High Court upheld the rejection of account-books for the assessment year 1972-73 due to technical reasons but accepted the disclosed turnover. The ... Rejection of account-books - best judgment assessment - acceptance of disclosed turnover - failure to maintain stock register under Section 12(2) of the Act - technical defect - electricity consumption not a ground for rejection - decline in turnover not a ground for rejection - action under Section 11(8) of the ActRejection of account-books - failure to maintain stock register under Section 12(2) of the Act - electricity consumption not a ground for rejection - decline in turnover not a ground for rejection - technical defect - acceptance of disclosed turnover - Validity of the revisional order rejecting the assessee's account-books and the appropriate consequence for assessment year 1972-73. - HELD THAT: - The revising authority correctly sustained the rejection of the assessee's account-books for AY 1972-73 because the assessee failed to maintain a stock register as required by Section 12(2) of the Act, and that omission-though technical-justified non-acceptance of the books. However, the court held that higher electricity consumption per se, or a decline in turnover, are not valid grounds for rejecting account-books. Applying the principle laid down in Commissioner of Sales Tax v. Pilot Shoe Co., where a defect is technical and the books otherwise disclose turnover, the disclosed turnover should be accepted. Accordingly, while the finding of non-acceptance of the books is not set aside, the disclosed turnover of the assessee must be accepted for assessment purposes.The rejection of account-books is maintained on the ground of failure to maintain the stock register, but the assessee's disclosed turnover is to be accepted.Final Conclusion: Revision allowed in part: the order rejecting the account-books for AY 1972-73 is upheld as a technical defect arising from failure to maintain the stock register, but the disclosed turnover of the assessee is to be accepted; a copy of the order is to be sent to the Tribunal for action under Section 11(8) of the Act and the assessee is awarded costs. The High Court upheld the rejection of account-books for the assessment year 1972-73 due to technical reasons but accepted the disclosed turnover. The higher electricity consumption and decline in turnover were not considered valid grounds for rejection. The failure to maintain a stock register led to the rejection. The revision was partially allowed, and the assessee's turnover was accepted. Costs were assessed at Rs. 300.