SHREE AMAR TRADING COMPANY Vs. STATE OF HARYANA

JUDGEMENT

(1.) The Sales Tax Tribunal, Haryana, at the instance of the assessee, has referred the following three questions of law under section 42 of the Haryana General Sales Tax Act, 1973 (hereinafter referred to as "the Act"), for the opinion of this Court :

(2.) The year in question is the financial year 1980-81. A surprise inspection was carried out on the business premises of the assessee-petitioner by the officers of the department on March 26, 1981, as a consequence of which, the wheat receipt register, stock register and labour register, were impounded. Examination of the impounded record revealed suppression of wheat purchases and suppression in the sale of wheat products. Notices were issued to the assessee from time to time by the Assessing Authority about the suppression and the irregularities detected, calling upon him to explain the position. After considering the entire matter, the Assessing Authority found that the dealer had suppressed his sales by 47 per cent, meaning thereby, that while the dealer had returned sales of 53 per cent turnover, but the same amounted to 100, thus, suppressing the sales by 47 per cent. Assessee had filed a return showing his gross turnover at Rs. 1,40,86,895. Average consumption of electricity on the basis of books of accounts of the assessee came to 76 units for manufacture of one tonne of wheat products. The Assessing Authority found that the actual consumption of electricity during the months of December, 1980 and January and February, 1981, came to 53 units for manufacture of one tonne of wheat products and, thereafter multiplied the gross turnover by 100/53 and determined the gross turnover at Rs. 2,65,79,000. Consumption of electricity was taken as a corroborative factor of suppression of sales, and and additional tax demand of Rs. 5,38,560 was created.

(3.) The assessee filed an appeal, which was decided by the Joint Excise and Taxation commissioner (Appeals), Ambala Cannt, on June 18, 1984. The Appellate Authority agreed with the findings recorded by the Assessing Authority on the basis of the seized record that there was suppression of purchase of wheat on the one hand and suppression of sale of atta, maida suji and bran on the other. Counsel for the assessee then raised an argument that enhancement of sales could not be more than 76/53 of the sales returned by the dealer. According to him, 53 units represented the average consumption of electricity during December, 1980 and January and February, 1981, per tonne of wheat products, while 76 units represented units on the average per tonne of wheat products in the year. On this basis, the sales returned at Rs. 1,40,86,895 needed to be multiplied by 76/53 instead of 100/53 as had been done by the Assessing Authority. This plea of the counsel for the assessee was accepted by the appellate authority. The quantum of enhancement in the gross turnover was, accordingly, reduced to 2,02,00,076 as against Rs. 2,65,79,000 determined by the Assessing Authority. Thereafter, the Assessing Authority recalculated the tax and created an additional demand of Rs. 2,83,840.