TaxTMI 
TaxTMI 
1988 (6) TMI 303
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....it petitions. Under rule 26(10) of the Karnataka Sales Tax Rules, the dealers registered under the Act are required to preserve all the accounts maintained by them together with all vouchers, declarations, way-bills, etc., for a period of 5 years after the close of the year to which they relate. This rule was amended with effect from 1st April, 1986 by the Karnataka Sales Tax (Amendment) Rules, 1986. The effect of the amendment is, the five years period mentioned in the said rule has been substituted with the following words "till the assessment for the year to which they relate has become final". Notices under section 28(1) of the Act was issued to the petitioners to produce the books of accounts for the year 1978-79 for the purpose ....
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....relating to the turnover for the year within the prescribed period. If the assessing officer is satisfied that the returns submitted by the dealers under sub-section (1) of section 12 of the Act is correct, they may complete the assessment without any further enquiry. If the assessing officer finds that the return submitted by the dealer appears to be incorrect or incomplete, he may proceed to make a best judgment assessment. But, before making any such assessment, the statute requires that the dealer should be given an opportunity of proving the correctness and completeness of the return submitted by him. For this purpose the provisions of section 28 empower the assessing officer to order production of accounts for the purpose of assess....
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....f 5 years is substituted and the dealer is now expected to preserve the books of accounts till the assessments for the year to which they relate has become final. The point that arises for decision on the submissions made by Sri Katageri is, whether it is permissible for the assessee-dealer, relying upon the old rule 26(10) to refused to produce the books of accounts and also to contend that he is not under any statutory obligation to produce them after a period of five years from the close of the year to which they relate? In order to appreciate these contentions, we have to look to the purpose of rule 26(10) which was in vogue till the 1st of April, 1986, from which day it was substituted by the new rule. Under that rule, every dealer ....
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....et me now advert to the scheme of the assessment and the rules governing the assessments under the Act in order to appreciate the contention of the petitioner. Rule 6 provides for the procedure to be observed in making the assessments. The taxable and total turnover has got to be determined for the purpose of assessment under the Act. Both the expressions are defined in section 2(u-1) and 2(u-2). What is relevant to notice is the definition of taxable turnover on which every dealer has to pay the prescribed tax under the charging section 5. "'taxable turnover' means the turnover on which a dealer shall be liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed, but s....
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....bsp; In the light of these provisions contained in the Act and the Rules which provide for a detailed procedure to be observed before an assessment could be made under the Act, is it the assessee's contention that such assessment can be done without reference to his own accounts? Such an argument has to be rejected outright as only suicidal besides being misconceived. The reasoning found in the decision of the Bombay High Court in the case of Commissioner o Sales Tax v. Ramdas Laxmidas [1976] 38 STC 354, is to be accepted as the correct approach and the petitioner's contention is liable to be rejected for the very reasons given by their Lordships in the said case. Their Lordships held that though rule 41-A of the Bombay Sales Tax Rule....