RAGHUBAR MANDAL HARIHAR MANDAL Vs. STATE OF BIHAR

JUDGEMENT

(1.) This is a case which has been stated under Section 21(3) of the Bihar Sales-tax Act, 1944. The assessee is a firm which carries on its business at Laheria Sarai, Darbhanga, under the name and style of Messrs. Raghubar Mandal Harihar Mandal and they were assessed to sales-tax for the quarters ending 31-12-1945, 31-3-1946, 30-6-1946, 30-9-1946, 31-12-1946, 31-3-1947 and 30-6-1947. With regard to the quarters ending 31-12-1945, 31-3-1947 and 30-6-1947 the assessment was made under Section 10(4) of the Act and with regard to the remaining quarters under Section 10(2) (b) of the Act. There was an appeal preferred to the Commissioner of Sales-tax against these assessments, but the appeal was dismissed. The Board of Revenue was then moved in revision, but by its order dated 31-7-1948 it rejected the petitions in revision. The Board was then moved with the request to refer the cases to the High Court on two questions, but by its order dated 10-12-1948 it refused to make a reference to this Court. The assessee then moved this Court, and by its order dated 27-4-1949 passed in miscellaneous Judicial Cases Nos. 13 to 19 of 1949, this Court asked the Board of Revenue to state a case on the following point formulated by it: "Whether the Sales-tax Officer is entitled under Section 10(2) (b) to make an assessment on any figure of gross turnover without giving any basis to justify the adoption of that figure. A slight inaccuracy has crept in this order, inasmuch as, as I have already pointed out, three of the assessments were made not under Section 10(2) (b) but under Section 10(4) of the Act. The Board of Revenue has reported that the assessee firm was continually engaged in the

(2.) Before I answer the question formulated I should like to point out in brief as to how the assessment with regard to each of these quarters was made. With regard to the first quarter, which is the quarter 1-10-1945 to 31-12-1945, the dealer did not furnish any return and he produced his books of account in response to the notice issued to him under Section 10(4) of the Act. The books of account showed a gross turnover of Rs. 72,762/- only, and the Sales Tax Officer made the assessment on the basis of a gross turnover of Rs. 3,00,000/-. In his order he says that there were irregularities in the account-books which could not be satisfactorily explained and that through enquiry from private sources it had appeared to him that the dealer had imported by rail large quantities of bullion in the names of his confederates. The Sales Tax Officer says that the dealer had adopted several devices for concealing almost all his large imports of bullion and their sales and that "it is with enormous labour that the few above mentioned irregularities and dexterous devices of concealment have been detected."

(3.) With regard to the quarter 1-1-1946 to 31-3-1946 the assessment was made under Section 10 (2) (b) of the Act, on a gross turnover of Rs. 3,00,000/-, though the return submitted showed a gross turnover of Rs. 1,10,700/15/0 only. The returns were found to be untrustworthy, and in the order with regard to the quarter also it had been stated that it had transpired after confidential enquiries that the dealer had imported very large quantities of bullion in his own name and in the names of -several confederates. A certain purchase was said to have been wrongly shown as purchase on account of temple. With regard to the third quarter 1-4-1946 to 30-6-1946, the assessment was made on a gross turnover of Rs. 4,00,000/- though the return had indicated a gross turnover of Rs. 2,48,370/-only. The dealer produced his accounts in verification of the return which showed a gross turnover of Rs. 1,48,204/- as against Rs. 2,48,370/- as shown in the return. These discrepancies and differences were not explained satisfactorily and hence the return and the accounts were rejected as unreliable. With regard to the quarter 1-7-1946 to 30-9-1946, it is stated that the return was not submitted in time and that when the dealer was proceeded against under Section 10(4), after the expiry of about one year from the due date of furnishing the return, the return was presented showing a ridiculously low turnover. Tn the order with regard to this quarter also it is said that the accounts were not properly kept by the dealer. The assessment was made on a gross turnover of Rs. 3,00,000/- though the return indicated a gross turnover of Rs. 68,445/12/0 only.