Preservation of account books does not justify withholding them where assessments remain pending under a deeming provision.

Rule 32(21) of the Kerala General Sales Tax Rules, 1963 was treated as a preservation provision, not as conferring any right to withhold account books after four years from the close of the relevant year. If the books are not produced, the assessing authority may proceed on available material and complete the assessment on best judgment. The pending assessments were also not barred by delay, because interim stay orders kept them incomplete and Section 17A of the Kerala General Sales Tax Act, 1963 deemed such assessments alive for completion. The Revenue was therefore entitled to complete the assessments on available records.

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Issues: (i) whether Rule 32(21) of the Kerala General Sales Tax Rules, 1963 permitted the assessee to withhold books of account after expiry of four years from the close of the relevant year; (ii) whether the assessment proceedings for the years in question could be treated as barred or concluded in view of delay, when they remained pending because of interim orders and the deeming provision in Section 17A of the Kerala General Sales Tax Act, 1963.

Issue (i): whether Rule 32(21) of the Kerala General Sales Tax Rules, 1963 permitted the assessee to withhold books of account after expiry of four years from the close of the relevant year.

Analysis: Rule 32(21) was treated as an enabling provision prescribing the period for which accounts must be preserved, not as a prohibition against producing them thereafter. The Court held that the rule does not create a converse right to destroy or withhold documents once the statutory period has expired. If accounts are not produced, the assessing authority may proceed on the basis of available material and complete the assessment on best judgment.

Conclusion: The assessee had no right to withhold the books of account merely because four years had elapsed, and the Revenue was entitled to insist on production for assessment purposes.

Issue (ii): whether the assessment proceedings for the years in question could be treated as barred or concluded in view of delay, when they remained pending because of interim orders and the deeming provision in Section 17A of the Kerala General Sales Tax Act, 1963.

Analysis: The assessments remained pending because interim stay orders prevented completion of the proceedings. The Court applied Section 17A, which deems incomplete assessments for the relevant pre-1.4.1993 period to be pending and permits completion notwithstanding earlier judicial orders. The Court also accepted that the assessee could not rely on the delay caused by its own stay order to defeat the assessments.

Conclusion: The pending assessments were not barred, and the Revenue could lawfully complete them in accordance with Section 17A.

Final Conclusion: The appeal succeeded, the impugned view against the Revenue was set aside, and the assessing authority was permitted to complete the assessments on available records, including by best judgment where necessary.

Ratio Decidendi: A statutory requirement to preserve account books for a specified period does not confer a right to withhold them when assessment proceedings remain pending, and a deeming provision keeping such assessments alive enables the Revenue to complete them despite the lapse of time or interim delay.

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