GANESH JEWELLERS Vs. COMMISSIONER SALES TAX

JUDGEMENT

(1.) The assessee in the instant case is M/s. Ganesh Jewellers, Chowk, Lucknow. It carries on the business of dealing in silver ornaments. For the assessment year 1972-73, it disclosed its gross turnover of Rs, 69,446.97 and claimed exemption for the sales made to registered dealers against 3-Ka forms. The net turnover was disclosed at Rs. 9,207.54. Rejecting the accounts, the assessing officer fixed the net turnover at Rs. 5,00,000 which was reduced in appeal to Rs. 3,00,000; Aggrieved, the assessee went up in revision before the Additional Judge (Revisions), Sales Tax, Lucknow and urged that its accounted version deserved to be accepted. In the alternative, it prayed for further reduction in the net turnover as determined by the appellate authority. The Commissioner was also aggrieved by the order of the Assistant Commissioner (Judicial), Lucknow, reducing the turnover as determined by the Sales Tax Officer to Rs. 3,00,000. He accordingly also preferred a revision before the Judge (Revisions), Sales Tax. The learned Judge (Revisions), Sales Tax, dismissed both the revisions, vide his order dated 19th of April, 1980. Aggrieved, the assessee has invoked the revisional jurisdiction of this Court under Section 11(1) of the Sales Tax Act.

(2.) It is contended on behalf of the assessee that the sales tax authorities were, in the circumstances of the case, not justified in rejecting the accounted version of the assessee with regard to its turnover for the assessment year 1972-73. The Judge (Revisions) pointed out that the purchases of old bullion and ornaments made by the assessee were not supported by regular purchase vouchers and while the names of the sellers had been noted, their addresses were not noted by the assessee with the result that the purchases were not verifiable. He also pointed out that the details of the opening and closing stocks were not furnished and no stock taking had been done by the assessee. He also held that the assessee used to take out ornaments outside Lucknow for sale and the challans through which the ornaments were taken were not preserved and were not forthcoming. He held that in the circumstances, the accounted version was not properly verifiable and it was difficult to place reliance on the turnover of the sales disclosed by the assessee. It will thus be seen that the sales tax authorities had proceeded to ignore the accounted version of the assessee and to make the best judgment assessment as they were not in a position to verify the correctness of the accounted version for the following four reasons:

(3.) Sub-section (3) of Section 7 of the U.P. Sales Tax Act runs thus: If no return is submitted by the dealer under Sub-section (1) within the period prescribed in that behalf or, if the return submitted by him appears to the assessing authority to be incorrect or incomplete, the assessing authority shall, after making such inquiry as he considers necessary, determine the turnover of the dealer to the best of his judgment and assess the tax on the basis thereof.