TaxTMI 
TaxTMI 
TaxTMI 
2010 (9) TMI 1095
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....alized the assessment on the following turnovers for the impugned period: G.T.O: Rs. 6,69,380 E.T.O: NIL N.T.O: Rs. 6,69,380 The officials of Vigilance and Enforcement Wing, Vijayawada along with the Staff of the Mines and Geology Department examined the business records of the Appellants specifically with reference to the particulars of electricity consumption made by them. They had worked out the production particulars of Stone Chips for the year 1994-95 on the basis of electricity consumption and had finally concluded that the sales recorded in the Books of Accounts were disproportionate to the production particulars arrived at on the basis of the electricity consumption. They had accordingly worked out the sales suppressions on the basis of the electricity consumption. The Vigilance and Enforcement Wing, Vijayawada communicated the above facts to the DCTO, Kenchikacherla of Nandigama Circle along with the inspection material. Then, the CTO of the Nandigama Circle re-assessed the Appellants for the impugned period on additional turnover which was considered to be sale suppression and raised a demand of Rs. 37,66,636. Aggrieved by these orders, the Appellants had preferred ....
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....nite Stone Chips. The electricity consumption at best, might be taken to corroborate the stand taken on said suppressions. Several Hon'ble Courts had accordingly observed on this issue in the following cases: (i) M/s. General Electric Company of India Ltd., v. The Sales Tax Officer, Kanpur-reported in 33 STC 108. (ii) M/s. Mahashakti Oil Mills v. The Commissioner-Sales Tax, Lucknow, reported in 30 STC 390. (iii) M/s. Mahavir Prasad Jagadish Prasad v. Commissioner of Sales Tax, U.P. reported in 27 STC 337. (iv) M/s. Kalyani Oil Mills v. The State of Madras, 32 STC 542. (v) M/s. St. Teresa's Oil Mills v. State of Kerala, 25 STC 497. (vi) M/s. Sri Lakshmi Satyanarayana Rice Mill v. The State of Andhra Pradesh, 25 STC 96. The Books of Accounts had been thoroughly verified by the Assessing Authority when the Original Assessment was made. The rejection of the Original Assessment at this juncture should not arise. The consumption of the electricity was no material at all and it could not be the basis to re-open the Assessment. In the above said case laws, it was held that on the strength of the electricity consumption alone, no Best Judgment Assessment could be made, unless there w....
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.... In this case, it is held by the Hon'ble High Court of U.P. that information with regard to the high consumption of electricity maybe a circumstance justifying action under Section-21 of the U.P. Sales Tax Act, 1948. But the high consumption of electricity by itself is no material for rejecting the Account Books of the Assessee. Something positive and concrete pertaining to the Books of Account should be placed on the record before the Account Books are rejected and a best judgment assessment is made. (iii) Mahavir Prasad Jagadish Prasad, Varanasi v. Commissioner-Sales Tax, U.P, reported in 27 STC 337. In this case, it is held by the Hon'ble High Court of U.P that the high consumption of electricity alone cannot be held to be a material justifying rejection of the accounts particularly when the Assessee's accounts had once been accepted during the regular assessment proceedings. (iv) M/s. Kalyani Oil Mills, Madras v. The State of Madras, reported in 32 STC 542. It is held by the Hon'ble High Court of Madras that the Assessment based on the electricity consumption cannot be said to be a correct basis without any other material. As the accounts were defective, a best Judgment assess....
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....is for fixing the turnover. In the decision of the Hon'ble High Court of Kerala in case of Dy. Commissioner of Sales Taxes (Law) Board of Revenue (Taxes), Ernakulam v. Sri Gopinadha Pillai reported in 61 STC 314, it is held that Where the Assessing Authority made the estimate on the basis of a well accepted method as recognized by this Court in K.T. Antony v. State of Kerala (1976)37 STC 148 and other cases, the Tribunal, in our view, ought not to have, without intelligible reasons based on some material, reversed the finding of the Assessing Authority. In the decision in case of M/s. K.T. Antony v. State of Kerala, it is held by the Hon'ble High Court of Kerala that a test check was not necessary and upheld the action of Authorities in making an estimate on the is that 10 units of current were required for crushing one quintal of The electricity consumption can also be a basis for making an estimation, when the accounts are found to be unrealistic and no other relevant material is available in support of the Appellants. In the decision in case of M/s. Melton India v. Commissioner-Trade Taxes, U.P., (2007)2 SCC 705, it is held by the Hon'ble Supreme Court of India that the estim....
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....en, are prior to Esufali's case. Though, the General Electric Company's case was reported in 33 STC 108, there was no reference to Esufali's case. After Esufali's case, the Courts have expressed different view on the vigour of nexus between the material and the assessment. This is evident from the case laws referred by the SR and they finally culminated in Melton's case of the Hon'ble Supreme Court of India. The case laws, relied upon by the SR in this regard are carefully examined on the basis of electricity consumption made by the Appellants. The CTO worked out the probable and expected production of Granite Stone Chips and arrived at the turnover on the basis of electricity consumption. The CTO followed the formula furnished by the Mines and Geology Department in this regard. When the Books of Accounts and the other connected information requested in writing, by the CTO, the officer has no other option but to proceed to finalise the assessment on the basis of material supplied by the officials of the Vigilance and Enforcement Wing and the Mines and Geology Department. The action of the CTO in arriving at the turnover on the basis of electricity consumption is not against the ....