BHAGWAN DAS SUD AND SONS Vs. FINANCIAL COMMISSIONER

JUDGEMENT

(1.) THE appliqant-firm, Bhagwan Das Sud and Sons of Hoshiarpur, was, on the basis of best judgment assessment, assessed to Rs. 4,388-15-0 sales tax on the total turnover of Rs. 3,00,000 after allowance of deductions have been made for one amount of Rs. 11,434-4-9 in respect of the goods sold to registered dealers and for another amount of Rs. 1,45,509-8-0 on account of the goods despatched to places outside the State. This was by the Assessing Authority's order of 7th february, 1955.

(2.) THE applicant in its return for the year 1951-52 showed total purchases of Rs. 4,58,463-5-9 and sales of Rs. 1,59,553-13-9. It claims deductions of the two amounts for which deductions have actually been allowed and after allowance of such deductions the taxable turnover left was rs. 2,610-1-0, on which the applicant paid sales tax in the amount of Rs. 81-9-0. The Assessing authority found (1)that the petitioner-firm had not prepared an account of profits and losses, it had kept no account of opening and closing stock nor capital account and it has maintained no balance-sheet for the relevant year, (2) that the purchases were of the value of a little over four and half lacs and the sales shown were of the value of the little over one and a half lacs, which disparity was abnormal and (3) that the applicant had purchased ten items of drums of considerable value and some timber, including fifteen sleepers of which no entries were made by it in its books and thus of which it failed to show sales. On these considerations the Assessing authority came to the conclusion that the account books of the applicant-firm are unreliable and not dependable. It then proceeded to best Judgment assessment and did so on consideration of the amount of purchases and sales and the scrutiny of the accounts, as were available, of the applicant-firm.

(3.) THE applicant-firm went in appeal to the Deputy Excise and Taxation Commissioner against the order of the Assessing Authority and the Appellate Authority dismissed the appeal, agreeing with the Assessing Authority, on 11th December, 1956. The applicant-firm then filed a revision application against the appellate order of the Appellate Authority to the Excise and Taxation commissioner. He also considered the grounds given by the authorities below and came to the conclusion that the account books of the applicant-firm could not be relied upon and that the assessing Authority had proceeded to best Judgment assessment on such material as it could find in the case. The order of the Excise and Taxation Commissioner is of 18th November, 1956. Against this order the applicant-firm went in second revision to the Financial Commissioner. The grounds of revision to the Financial Commissioner are not part of the record of this case. All the same we permitted the learned counsel for the applicant to read the grounds to us. In it the case has been stated at full length on behalf of the applicant-firm. The learned Financial commissioner, however, on 3rd May, 1957, refused to interfere with the orders of the authorities below coming to the conclusion that no question of law was involved in the case and that there was only a question of fact, whether or not the accounts of the applicant-firm are reliable. He dismissed the revision application. The applicant-firm then applied to the Financial commissioner under Section 22 (1)of the East Punjab General Sales Tax Act (East Punjab Act no. 46 of 1948), for drawing up a statement of the case and for reference of the following questions of law to the High Court (