Stock record compliance under trade tax law was not disproved, so turnover enhancement lacked factual foundation.

A manufacturer must maintain stock books for raw materials and products at each stage of production under Section 12(2) of the U.P. Trade Tax Act, unless the proviso applies. The first appellate authority found that the relevant movement registers were maintained and that the assessing authority had not identified any specific statutory deficiency or material showing escaped turnover. That finding was not specifically overturned by the Tribunal, which instead concluded that stock movement was not properly maintained without addressing the production stages or the factual basis for breach. On that material, the finding of breach and the consequent enhancement of turnover were not justified.

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Issues: Whether the assessee had failed to maintain the stock books required for a manufacturer under Section 12(2) of the U.P. Trade Tax Act, 1948 and whether, on that basis, enhancement of turnover was justified.

Analysis: Section 12(2) requires a manufacturer to maintain stock books for raw materials and products at every stage of production unless relaxed under the proviso. The first appellate authority had examined the manufacturing process and found that the relevant movement registers were maintained and that the assessing authority had not explained what was missing in terms of the statutory requirement. That finding on maintenance of stock records and the absence of material showing escaped turnover was not specifically reversed by the Tribunal. The Tribunal nevertheless concluded that proper movement of stock was not maintained, without discussing the production stages or the factual basis on which the statutory breach was said to be established.

Conclusion: The finding of breach of Section 12(2) and the resultant enhancement of turnover were not justified.

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