Statutory memo compliance can justify rejection of accounts, and estimated turnover may be sustained on past history.

Where a dealer is under a statutory duty to issue cash memos or credit memos and fails to comply, the account books may be rejected because the omission affects their reliability. Once the books are rejected, the disclosed turnover does not bind the taxing authority if it was itself only an estimate, and the taxable turnover may be sustained on the basis of past history and surrounding circumstances. The assessment based on rejection of accounts and estimated turnover was therefore maintained.

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Issues: (i) whether the assessee's account books could be rejected for failure to issue cash memos or credit memos as required by the statutory scheme; (ii) whether, after rejection of accounts, the disclosed turnover could be displaced and the taxable turnover enhanced on estimate.

Issue (i): whether the assessee's account books could be rejected for failure to issue cash memos or credit memos as required by the statutory scheme.

Analysis: The obligation to issue cash memos or credit memos was treated as a statutory requirement applicable where the prescribed conditions were satisfied. Non-issue of such memos was not treated as a mere technical lapse, because compliance with the account-keeping provisions and the memo requirement were both relevant to the reliability of the books. On the facts, the conditions for the statutory duty were satisfied and the assessee had not issued the required memos.

Conclusion: The rejection of the account books was justified and was upheld against the assessee.

Issue (ii): whether, after rejection of accounts, the disclosed turnover could be displaced and the taxable turnover enhanced on estimate.

Analysis: Once the books were rejected, the disclosed net turnover, which itself was based on estimate and not on accepted books, did not bind the taxing authorities. The authorities were entitled to rely on the assessee's previous history and the surrounding circumstances to sustain the estimated taxable turnover determined in appeal.

Conclusion: The enhancement of taxable turnover was upheld and the assessee's challenge failed.

Final Conclusion: The revision was dismissed, and the assessment based on rejection of accounts and estimated taxable turnover remained undisturbed.

Ratio Decidendi: Where a dealer is under a statutory duty to issue cash memos or credit memos and fails to do so, the accounts may be rejected, and once the accounts are rejected an estimated turnover based on the available material and past history may be sustained.

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