COMMISSIONER OF SALES TAX Vs. UTTAMCHAND DURLABHDAS

JUDGEMENT

(1.) THIS is a reference made by the Sales Tax Appellate Tribunal referring for our answer the following questions of law :

(2.) THE accounting period with which we are concerned in this reference is from 13th November, 1966, to 2nd November, 1967. The books of account of the assessee were rejected on the ground that no separate account of the molten silver was maintained by the assessee. The Tribunal held that this was not a sufficient ground for rejecting the books of account. The books were properly maintained and no false entries were found in them. There was no statutory rule making it incumbent on the assessee to maintain separate account of molten silver. In these circumstances, in our opinion, the Tribunal reached the correct conclusion that the books of the assessee could not be rejected and resort could not be taken to the best judgment assessment.

(3.) THE facts found by the Tribunal so far as the second question is concerned are that the assessee purchased broken ornaments of silver which were not worth being used and were not purchased for use. The ornaments purchased were immediately melted and the melted silver was sent to Bombay for sale. The Tribunal, therefore, held that the ornaments purchased did not fall within the description of "silver ornaments of personal wear" under entry 2, Part V of Schedule II to the Madhya Pradesh General Sales Tax Act, 1958, and the purchases were not liable to be taxed at 1 per cent. It was also held that the ornaments were purchased as bullion and therefore, tax at the rate of 1/2 per cent only could be charged. In our opinion, the Tribunal came to the right conclusion on this point also. Silver ornaments of personal wear falling within entry 2 of Part V of Schedule II, in our opinion, mean such ornaments which are meant for use. In the instant case the ornaments were not sold as ornaments, nor were they purchased as ornaments. The intention in purchasing and selling the ornaments was to purchase and sell silver.