DWARAKADAS DAMODARLAL Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) This tax revision case is at the instance of the assessee-dealer directed against the order of the Sales Tax Appellate Tribunal in T.A.NO. 975 of 1988, dated 28-9-1992.

(2.) The facts of the case in brief are as follows: The petitioner is a dealer in pulses, sugar etc., and registered under the Andhra Pradesh General Sales Tax Act (hereinafter referred to as 'the Act') on the rolls of the Commercial Tax Officer, Maharajgunj Circle, Hyderabad. For the assessment year 1984-85, the assessee filed its A-2 returns disclosing the following turnovers: <FRM>JUDGEMENT_219_ALT6_2001Html1.htm</FRM> The Commercial Tax Officer, while framing the assessment, verified the books of accounts and arrived the following turnovers for the final assessment: <FRM>JUDGEMENT_219_ALT6_2001Html2.htm</FRM> The Commercial Tax Officer found that the dealer did not maintain separate sales accounts for the taxable and exempted turnovers of pulses and therefore he took into account the purchase price of dall both local and outside and arrived the turnover by adding 10% gross profit to the purchase price. The petitioner-dealer reported the sales of gram dall Rs. 1,44,53,414-71 paise, Toor dall Rs. 26,69,950-10 ps. and Masoor dall Rs. 2,04, 967-44 paise against their respective purchases of gram dall of Rs. 1,59,84, 594-75 paise, Toor dall of Rs. 26,88,870-87 ps. and Masoor dall Rs. 2,03,569-28 paise. The method adopted for arriving the total turnover by the assessing officer had resulted in an addition of Rs. 31.29.641.00 relates to the gram dall, Rs. 18,958-00 relates to the Masoor dall and Rs. 87,807-00 relates to Toor dall. In addition, the Assessing Officer also made an addition of Rs. 1,26,580.00 relating to the sale of gram dall, which was said to have been purchased from a local dealer by name Sri Venkateswara Traders. The assessment was accordingly completed by the Commercial Tax Officer. The said assessment was assailed before the first appellate authority. The first appellate authority, though recorded in his order all the objections that are raised by the petitioner-dealer, dismissed the appeal making the following observations:

(3.) The learned Counsel for the petitioner- dealer contended that the assessing officer was not justified in resorting to the estimated addition to the turnover by adding 10% of the gross profit to the purchase value of both the purchases from local as well as from outside. The learned Counsel contended that there is no dispute with reference to the maintenance of the books of accounts, which reflect the purchases as well as the sales. Merely because the petitioner-dealer failed to maintain separate accounts with reference to the purchases made locally and outside, the same would not vitiate the results declared by the dealer in its returns. It is also contended that the authorities did not reject the books of accounts or the return filed by the dealer, but only made an estimated addition to the turnover, for which there is absolutely no justification and there is no provision also in the Act. Therefore, the addition to the turnover is illegal and unjustified. The learned Counsel also contended that the assessing officer did not find any defects either in the sale value or purchase value of any of the items. Merely because the sale turnover is less than the purchase turnover, it is not open to the assessing officer to estimate the sales turnover by adding 10% to the gross profit. In order to resort to any estimation, the assessing officer has to reject the books of accounts, by recording valid reasons. In the absence of any such reasons recorded by the assessing officer, the method adopted by the assessing officer, which was confirmed by the appellate authority, is clearly contrary to the provisions of the Act and the same is also without jurisdiction. The learned Counsel also contended that though the petitioner- dealer did not maintain separate books of accounts for the local sales as well as the sale of the Dall purchased from the outside the State, still they are identifiable, which fact was accepted by the assessing authority as well as by the appellate authorities. Therefore, the non-maintenance of separate accounts is not a ground to resort for estimation of the turnover without rejecting the books of accounts or without giving any finding that the return filed by the petitioner- dealer is incorrect or incomplete.