TaxTMI 
TaxTMI 
1953 (9) TMI 15
X X X X Extracts X X X X
X X X X Extracts X X X X
....ision, after hearing the parties came to the conclusion that the learned Sales Tax Officer was right in rejecting the books of account and making assess- ment according to the best of his judgment. Order of the Commissioner of Sales Tax dated 7th November, 1949, is marked Exhibit C. The assessee then moved the Board of Revenue, Bihar, by petition dated 11th November, 1949, Exhibit D, for revising the order of the Commissioner of the Chota Nagpur Division. The Board after hearing the parties dismissed the revision petition by its order dated 20th February, 1950, Exhibit E. The assessee being aggrieved at the orders of the Board came up before it by petition dated 15th June, 1950, Exhibit F, to refer the following questions of law to the Honourable High Court. Questions: Whether on the facts and in the circumstances of the case, the conclusion arrived at regarding the petitioner's gross and taxable turn- over are legally sound or not. Whether the addition of the sum of Rs. 93,533-5-0 to the gross turnover for the quarter on the likelihood of the petitioner having carried on business in food-grains etc., completely ignoring the fact that the petitioner's licence as a dealer in f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has not been attacked in the reference petition. What is attacked is the amount determined. The assessee has clearly taken steps to hide the real turnover. When this is proved, the only question left open to the assessing officer is to assess after estimating the possible amounts suppressed from the account books. These points are purely questions of fact, and not of law. Then there is a point about Shri Dayal Bajaj being a partner. The finding of the Commissioner is that he is not a partner. It cannot be said that the Commissioner cannot come to a finding like this, just because the Sales Tax Officer and the Income-tax Officer mentioned him as a partner. The Commissioner gives reasons to hold that Bajaj was not a partner. Again, this is a question of fact. If at all a point of law can be raised, it will be on an argument that the assessment is arbitrary Sand excessive. A best of judgment assessment is bound to be specula- tive, but it has to be based as far as possible on information available. The conduct of the assessee, as available from the information collected, justifies the assessment. The assessee has now moved the Honourable High Court and the Board, as required in ord....
X X X X Extracts X X X X
X X X X Extracts X X X X
....15/87 W. Bunder J. Ram Lal 25 " 1-7-1948 14615/38 Ahmedabad M. Mehta & Co. 7 " 19-7-1948 14868/38 Do. P. Chand 1 " 19-7-1948 33 bales 8069/8 W. Bunder J. Ram Lal 4 " 20-10-1948 4 bales Messrs. Ram Swarup Mohan Lal. 15432/38 Ahmedabad Vishun 14 " 29-7-1948 7980/82 W. Bunder Bala Chand 1 " 26-8-1948 7992/80 Do. R. Mohan Lal 20 " 15-9-1948 35 bales 38/21278 Ahmedabad Chatterbhuj 4 " 1-10-1948 4 bales These figures were not to be found in his accounts and on being questioned the dealer completely denied to have received them but in the face of documentary evidence present in the Railway Station against these firms, their contention holds no ground. It is clear that no sales tax would have been paid on the receipt of these bales of cloth if the department had not actively obtained this information from the Railway department. Evidently, the dealer took advantage of the non-submission of returns by him and deliberately produced false accounts to evade the payment of tax. The books of accounts have, therefore, to be rejected and assessment is made to the best o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ters under assessment to the gross turnover obtained from his books of accounts to account for the suppression made by the dealer during the quarters on account of his business in other goods besides cloth. The learned Commissioner of Chotanagpur Division agreeing with the findings of the Sales Tax Officer dismissed the appeal. His observa- tions made in his judgment on the 1st question of law is quoted below for facility of reference: "From the conduct of the appellants it is clear that they had no good evidence to produce to prove that the cloth business had nothing to do with them and certain additional facts in this connection have been mentioned in argument before me which have not been refuted. These are that Jaidayal Bajaj is a servant of Mr. Nagarmal Modi and that there is no proof of any shares in the firm invested by him or of any distribu- tion of profits to him. The temporarily created firm of Ram Swarup Mohan Lal existed only during the time of cloth decontrol. It had the same premises as Bhimraj Nagarmal and operated on the same bank account. Even a railway claim for Rs. 600 in favour of Ram Swarup Mohan Lal was cashed by Messrs. Bhimraj Nagarmal. These assertions ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Ramsaroop Mohanlal were Ramsaroop and Mohanlal who are both sons of Nagarmal who was senior partner of the firm Messrs. Bhimraj Nagarmal. The Sales Tax Officer was of opinion that the firm of Ramsaroop Mohanlal was merely a pretence and the sales of the petitioner firm were made through Ramsaroop Mohanlal merely for the purpose of evading sales tax. The Sales Tax Officer accordingly held that the sales of cloth in the name of Messrs. Ramsaroop Mohanlal were really sales of the petitioner firm, upon whom was imposed the liability to pay the tax. For the three quarters in question the Sales Tax Officer computed upon the material available before him that the petitioner was liable to pay tax on the sale of cloth to the extent of Rs. 1,05,800, Rs. 1,56,400 and Rs. 18,400. The Sales Tax Officer further held that the petitioner had suppressed also the sale of food-grain to the extent of Rs. 93,533-5-0 for each of the three quarters. Assessment was made upon the petitioner according to these figures. Appeals were taken by the petitioner to the Commissioner of Sales Tax against the order of the Sales Tax Officer but the appeals were dis- missed. Revision petitions were then preferred befor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted by the learned counsel who appeared for the petitioner assessee. It was also not denied at the hearing of the appeals that the petitioner firm Messrs. Bhimraj Nagarmal and the firm of Ramsaroop Mohanlal had business in the same premises and they operated on the same bank account. The Commissioner noted and this fact has been referred by the Board of Revenue in the course of its order that a railway claim of Rs. 600 in favour of Ramsaroop Mohanlal was cashed by Messrs. Bhimraj Nagarmal. In these circumstances it is impossible to accept the argument of the learned counsel for the petitioner that there was no material to support the finding of the Sales Tax Authorities that the firm of Ramsaroop Mohanlal was a bogus firm created by the firm of Bhimraj Nagarmal for the purpose of the sale of cloth and for the purpose of evasion of sales tax. The question is primarily a question of fact and the finding of the Sales Tax Authorities on this question is supported by sufficient material. The second question is somewhat more difficult. The contention of the petitioner is that even if the sale of cloth made by Ramsaroop Mohanlal was held to be really sale of cloth in the name of Messrs....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or to Ramsaroop Mohanlal but they were delivered to Chota- nagpore Umbrella Works, Dharamchand Jwalla Dutta and Nagarmal Chandi Prasad. In this connection, counsel for the petitioner referred us to the judgment of the Assistant Commissioner of Sales Tax in the con- nected Sales Tax Appeal Nos. 536, 537 and 538 of 1949-50 dated the 17th of January, 1950. In the course of this order the Assistant Commissioner states that out of the 15 consignments only 12 were verified and from the evidence of the clerk it appeared that out of the 12 Consignments one was delivered to Chotnagpore Umbrella Works, one to Dharamchand Jwalla Dutta, two to Nagarmal Chandi Prasad and one to Bhimraj Nagar- mal or Ramsaroop Mohanlal. It follows therefore that as regards the four consignments which were delivered to Chotanagpore Umbrella Works, Dharamchand Jwalla Dutta and Nagarmal Chandi Prasad, the assess- ment made on the petitioner for the sale of cloth is arbitrary. So far as assessment is based upon the other 11 consignments, which is set out at page 4 of the paper book, it must be held that assessment is based upon proper material. It is for the Sales Tax Authorities to ascertain which of the four cons....