STATE OF ORISSA Vs. DURGADUTTA MODA

JUDGEMENT

(1.) THIS is a reference made under section 24 (1) of the Orissa Sales Tax Act (hereinafter referred to as the Act) by the Member, Sales Tax Tribunal, on the following two questions of law for determination of this court :

(2.) THE assessee, a registered dealer under the Act, deals in aluminium goods. He had been assessed to sales tax under the Act for the year 1962-63. On a discovery of certain dealings of the assessee with other dealers, which had not come to light during the assessment proceedings, action was taken under section 12 (8) of the Act. In the accounts of the third party, the following transactions of the assessee were found :

(3.) THE two questions which have been referred to us seem to be not very appropriate. What exactly arose from the Tribunal's order in second appeal and is canvassed by learned standing counsel is that in an assessment under section 12 (8) of the Act, the assessing officer is entitled to make a best judgment assessment and he need not confine his assessment to the exact escaped turnover. A distinction has got to be maintained between escapement and under-assessment. In the case of under-assessment there is no scope for estimate, because the turnover would remain the same, while a lower rate has been applied on the earlier occasion, the appropriate rate has only to be applied. The case of escapement, however, has a completely different basis. We would accordingly recast the questions keeping in view the actual dispute to the following effect :