Turnover enhancement needs statutory notice and proof that stock shortage represented sales, not mere estimation.

Enhancement of turnover based on stock shortage requires compliance with the statutory notice procedure under Rule 50(3) of the Orissa Sales Tax Rules, 1947, and observance of natural justice; where notice was not issued before enhancement, the exercise of power was unsustainable. A mere shortage of stock found by eye-estimation, without physical weighment or material linking the alleged suppressed stock to actual sales, does not by itself justify enhancement of turnover. On these grounds, the Tribunal's enhancement was set aside and the assessment as reduced by the first appellate authority was restored.

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Issues: (i) whether enhancement of assessment by the Tribunal without compliance with the notice requirement under Rule 50(3) of the Orissa Sales Tax Rules, 1947 was sustainable; (ii) whether shortage of stock by eye-estimation, without material to show that the alleged suppressed stock was sold, could justify enhancement of turnover.

Issue (i): whether enhancement of assessment by the Tribunal without compliance with the notice requirement under Rule 50(3) of the Orissa Sales Tax Rules, 1947 was sustainable.

Analysis: The enhancement was made without the prescribed notice. The procedural safeguard embodied in the Rules and the basic requirement of natural justice were not followed. Where the statute requires notice before enhancement, non-compliance vitiates the exercise of power.

Conclusion: The enhancement was not sustainable and was liable to be interfered with.

Issue (ii): whether shortage of stock by eye-estimation, without material to show that the alleged suppressed stock was sold, could justify enhancement of turnover.

Analysis: The stock discrepancy was based on eye-estimation rather than physical weighment, and the record did not contain material showing that the alleged shortage was actually sold by the dealer. A mere stock deficiency, by itself, does not establish suppression of sales. Enhancement of turnover requires evidence connecting the shortage to actual sales.

Conclusion: The shortage of stock could not, by itself, justify enhancement of turnover.

Final Conclusion: The revision succeeded, the Tribunal's enhancement of turnover was set aside, and the assessment as reduced by the first appellate authority was restored.

Ratio Decidendi: Enhancement of turnover on the basis of stock shortage is unsustainable unless the statutory procedure for enhancement is followed and there is material evidence that the alleged shortage represented sales by the dealer.

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