Suppressed turnover and penalty upheld where D7 slips proved unaccounted sales and purchases under sales tax law.

Inspection-generated D7 slips were treated as reliable evidence of unaccounted purchase and sales turnover, and the Tribunal found no acceptable correlation between those slips and the turnover already accounted for. It therefore restored the suppressed turnover to the extent proved by the material on record, confined the addition to the actual suppression, and sustained penalty under the sales tax law because the suppression stood established. No interference was called for with the restricted addition or the penalty.

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Issues: Whether the Tribunal was justified in restoring the suppressed turnover of Rs. 7,63,500/-, restricting the addition on the proved suppression, and sustaining the penalty under the sales tax law.

Analysis: The inspection yielded D7 slips relating to business transactions, and the authorities found that a portion of the entries represented unaccounted suppression of purchase and sales turnover. The Tribunal held, on a scrutiny of the records, that the slips had no acceptable correlation with the turnover claimed to have been accounted for and that the deletion ordered by the appellate authority was unsustainable. It also considered the period covered by the slips and the inspection date, and confined the addition to the extent warranted by the suppression. As the suppression stood proved from the material evidence, the Tribunal sustained the levy of penalty, though limiting it to the actual suppression.

Conclusion: The restoration of the suppressed turnover, the restricted addition, and the penalty were upheld, and no interference was called for.

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