TaxTMI 
TaxTMI 
1971 (10) TMI 97
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....on, Bhubaneswar. One Kunjabehari Swain was the proprietor of the Orissa Sanitary Mart. K.C. Panda was the manager of the Orissa Sanitary Mart and also the manager of the petitioner-firm. Manmohan Lal and K.C. Panda became partners of the petitioner-firm in 1959, i.e., after the impugned period of five quarters for which the assessment was made. The S.D.O., Intelligence Circle, got information that the transaction effected on behalf of the Orissa Sanitary Mart to the tune of Rs. 14,717 was really effected by the Allied Dealers. Accordingly, the Sales Tax Officer, Cuttack Circle-I, after issue of necessary notice, assessed the petitioner. The turnover, which the petitioner had returned for the aforesaid impugned quarters, was enhanced by 50 p....
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.... arbitrary, pure guess and illegal in the circumstances of the case and also discriminatory. (4) Whether the assessing officer was not bound to give notice for enhancement of the turnover and his basis thereof prior to assessment and, if not, if the assessments are legal and justified in the circumstances of the case. (5) Whether there is any legal, reliable, admissible evidence to justify the inference that the impugned transactions are the transactions of the petitioner-firm, and, if not, if the assessments are legal. (6) Whether there was any material to assess for the quarters ending 30th June, 1958, to 31st March, 1959, and if the assessments are legal." 2.. After having heard Mr. Misra for the petitioner and the learned st....
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....artners subsequent to 31st March, 1959. 4.. The question for consideration is, even if all the materials accepted by the taxing authorities are accepted, whether a conclusion in law arises that the transaction was effected by the petitioner benami in the name of the Orissa Sanitary Mart. Each of these features may now be separately examined. If during the impugned periods the Orissa Sanitary Mart had no existence, obviously the sale in its name was fictitious. It cannot be disputed that K.C. Panda effected the sale. At that time he was not a partner of the Allied Dealers, but was only its manager. There are no materials that the goods supplied by K.C. Panda to the Public Health Division belongs to the Allied Dealers. This material lin....
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....nd the enhancement. Reference may he made to Raghubar Mandal Harihar Mandal v. State of Bihar[1957] 8 S.T.C. 770 (S.C.). After having perused all the judgments under consideration, we are satisfied that there are no materials indicating the nexus, and the enhancement is based purely on conjecture and surmise. The enhancement cannot, therefore, be supported. 6.. We, therefore, sum up our conclusion thus: (i) The finding of the sales tax authorities that the alleged transaction to the tune of Rs. 14,717 was effected by the petitioner-firm is based on no evidence and is contrary to law. (ii) Even assuming that in fact the petitioner effected such a transaction, then the taxable turnover of the petitioner would be enhanced only to the tun....