JAYANTILAL THAKORDAS Vs. STATE OF GUJARAT

JUDGEMENT

(1.) IN this reference under section 34 of the Bombay Sales Tax Act, 1953 (hereinafter referred to as the Act), the following two questions have been referred to us by the Sales Tax Tribunal :- " (1) Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that the principles of natural justice were not violated by the Sales Tax Officer in not recording statements of A. Alibhai and Company and the Angadia and not giving opportunity to the applicant-firm of cross-examining them. (2) Whether on the facts and in the circumstances of the case the Tribunal was justified in making an estimate of the turnover of sales higher than the detected suppression of sales. "

(2.) THE facts leading to this reference are as follows : THE applicant-firm, the assessee, is a partnership firm carrying on the business of manufacturing and dealing in art-silk ribbon. THE said firm as assessed for two periods from 1st April, 1955, to 31st March, 1956, and 1st April, 1956, to 31st March, 1957, and the assessment orders were passed in respect of those two separate periods of assessment. Later on, the Sales Tax Officer, Enforcement Branch, Bombay, seized certain account hooks of M/s. A. Alibhai and Co. of Bombay. Books Nos. 1 and 4 out of the seized books were uplak books containing certain transactions with different persons, the applicant-firm being one of them. THEse books were sent to the Sales Tax Officer, Surat, who also obtained extracts from the record of one Angadia through whom the applicant-firm is said to have despatched goods to A. Alibhai and Co. We may mention that an Angadia carries goods from one place to another for a consideration and usually carries these goods by railway trains. On scrutiny of the books of account of the assessee-firm in the light of the entries contained in the uplak books of A. Alibhai and Co. and the extracts from the record of the Angadia, the Sales Tax Officer came to the conclusion that the applicant-firm had suppressed sales of certain goods. THE turnover of the assessee-firm as assessed previously was Rs. 83,350 in 1955-56. THE suppression which was detected was to the extent of Rs. 7,712. THE Sales Tax Officer came to the conclusion that the assessee has suppressed the sales to the extent of Rs. 8,335. So far as the assessment year 1956-57 was concerned, the turnover assessed at the time of the original assessment was Rs. 1,36,634. THE suppression which was detected for the year 1956-57 was Rs. 761. THE Sales Tax Officer estimated the suppressed sales for 1956-57 at Rs. 13,668. THE turnover of escaped purchases was estimated at two-thirds of the turnover of the estimated suppressed sales. THE escaped turnover was thus determined and assessment orders were passed accordingly.

(3.) IT was urged before us, as had been urged before the Sales Tax Tribunal and other authorities, that no opportunity of cross-examining any person from the firm of Angadia or from the firm of A. Alibhai and Co. was given to the assessee-firm IT was contended before us that what was made available to the assessee was the extract from the uplak books of A. Alibhai and Co. and extract from the record of the Angadia. The assessee-firm also relied on the fact that a letter from A. Alibhai and Co. was produced by the assessee-firm before the Sales Tax Officer and the letter was to the effect that there were no dealings between A. Alibhai and Co. and the assessee-firm other than the transactions stated in the books of account of the assessee-firm. The Tribunal held that this statement of A. Alibhai and Co. did not give any explanation whatsoever regarding the uplak books and the transactions entered therein. According to the Tribunal, it was not possible to construe this statement of A. Alibhai and Co. in the form of a letter as meaning either that the uplak books did belong to A. Alibhai and Co. or that the transactions entered therein were not the transactions of the assessee-firm. Thus, the Tribunal also took into consideration the material which was brought on the record by the assessee at the time of the reassessment proceedings, and after weighing that piece of evidence in the light of the other materials before it, it decided not to place any reliance on that particular material, viz. , the statement in the form of a letter produced by the assessee from A. Alibhai and Co.