PYARELAL Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THIS order will dispose of Miscellaneous Petitions Nos. 222 and 223, both of 1969. These petitions under Article 226 of the Constitution are directed against the assessment of sales tax for the years 1963-64 and 1964-65.

(2.) THE petitioner in these petitions is one Pyarelal who is a manufacturer of wooden furniture. In the relevant accounting years the main business of the petitioner consisted of selling the furniture manufactured by him to the Defence Department (M. E. S.) through the Garrison Engineer, Jabalpur, who had given him certain contracts for the supply of furniture. According to the petitioner he did not sell any furniture to the public and the aggregate of payments received by him from the Garrison Engineer constituted his turnover for the relevant years. In the assessment year 1963-64, the petitioner filed four quarterly returns. The return for the 1st quarter was late by eight days; the return for the 2nd quarter was in time; the return for the 3rd quarter was late by 43 days; and the return for the 4th quarter was in time. The total turnover shown in the returns, which related exclusively to the sales made to the Garrison Engineer, was Rs. 2,00,629. 11. Some bills were also submitted by the dealer after the filing of return. The Sales Tax Officer did not accept the accounts of the assessee and made a best judgment assessment. He assessed the total sales to the Garrison Engineer at Rs. 2,91,385. 91. He also held that in the absence of proper accounts maintained by the assessee, the possibility of sales to other departments or customers could not be ruled out. The gross turnover of the assessee was, for this reason, determined at Rs. 3,20,000. In addition to the tax assessed on this turnover, the petitioner was made liable to penalties of Rs. 100, Rs. 3,500, Rs. 200 and Rs. 20 respectively under Sections 17 (3), 43 (1), 27 (2) and Rule 69-A of the Madhya Pradesh General Sales Tax Act, 1958. The petitioner went up in revision before the Deputy Commissioner of Sales Tax, who accepted the contention that there was a mistake in assessing the sales made to the Garrison Engineer and reduced the figure of such sales to Rs. 2,32,387. 00. But he also held that the petitioner must have been making sales to the public and on that basis the gross turnover was fixed at Rs. 2,40,000. The penalty imposed under Section 43 (1) was reduced from Rs. 3,500 to Rs. 1,000. Penalties imposed under other sections were maintained. In the assessment year 1964-65, the petitioner furnished four quarterly returns. The returns for the first and last quarters were filed in time. The return for the 2nd quarter was late by 11 days and that of the 3rd quarter by 16 days. The total turnover shown in the returns was Rs. 1,34,413 which related exclusively to the sales made to the Garrison Engineer. During the assessment proceedings the petitioner himself produced certificates regarding supplies to the Garrison Engineer, which showed that the total turnover of sales in that respect amounted to Rs. 1,83,905. 79. This figure was accepted so far as sales to the Garrison Engineer were concerned; but as the petitioner's accounts were not regularly kept, the Sales Tax Officer assessed the turnover to his best judgment at Rs. 2,50,000. In addition to tax, penalties of Rs. 2,000, Rs. 200, Rs. 20 and Rs. 20 were imposed respectively under Sections 43 (1), 27 (2), 17 (3) and Rule 69-A of the' Act. In revision, the gross turnover was reduced to Rs. 2,25,000. The penalty under Section 43 (1) was also reduced to Rs. 1,500, but other penalties were maintained.

(3.) IT is not disputed that the petitioner did not maintain proper accounts during the relevant years and the Sales Tax Officer was, therefore, justified under Section 18 (4) (d) of the Madhya Pradesh General Sales Tax Act to assess the petitioner to the best of his judgment. But it was argued by the learned counsel for the petitioner that there was no material on which it could have been held that the petitioner made any sales to the public and, therefore, the best judgment assessments to the extent they proceeded on the basis that sales were made to the public were arbitrary.