COMMISSIONER OF SALES TAX Vs. GANGARAM MOHANLAL MITTAL

JUDGEMENT

(1.) BY this reference under Section 44 of the M. P. General Sales Tax Act, 1958, hereinafter referred to as the Act, the following question of law has been referred to this Court for its opinion: Whether, under the facts and circumstances of the case, the non-maintenance of stock register, non-submission of stock list and non-maintenance of manufacturing account will not justify best judgment assessment under Section 18 (4) (d) of the M. P. General Sales Tax Act, 1958?

(2.) THE material facts giving rise to this reference briefly are as follows: The assessee is a dealer carrying on business of manufacturing and selling utensils. For the assessment of tax payable under the Act for the period between 25th October, 1965, and 12th November, 1966, the assessee submitted the return. According to the assessee, his gross turnover was Rs. 9,10,384. The Sales Tax Officer, however, enhanced it to Rs. 9,22,000. He held that as the assessee had failed to maintain stock register and manufacturing account from day-to-day, it was not possible to rely upon the accounts submitted by the assessee. The Sales Tax Officer, therefore, made assessment under the provisions of Section 18 (4) of the Act. On appeal, the Assistant Commissioner of Sales Tax, Indore, held that in the absence of stock register and manufacturing account, the correctness of the accounts submitted by the dealer could not be verified and, hence, the Sales Tax Officer was justified in proceeding to assess the dealer under the provisions of Section 18 (4) of the Act. On second appeal, the Board of Revenue held that while it was true that the accounts could be verified properly if there was a stock register and manufacturing account, as the maintenance of these books of account was not obligatory under the Act, their non-maintenance could not by itself justify best judgment assessment. The Board further held that assuming that the books of account could be rejected, in making best judgment assessment, the assessing authority will have to establish on ascertained facts that either the purchase of raw material or the sale of manufactured produce has been suppressed. In this view of the matter, the Board allowed the appeal and set aside the enhancement. Aggrieved by the order of the Board, the Commissioner preferred an application before the Board for making a reference and it is at the instance of the Commissioner that the aforesaid question of law has been referred to this Court for its opinion.

(3.) THE learned counsel for the department contended that, in the instant case, the Sales Tax Officer was justified in assessing the dealer to the best of his judgment, as provided by Section 18 (4) of the Act, because the method of accounting employed by the assessee was such that assessment could not properly be made on that basis. Now, Section 18 (4) of the Act reads as under: