DEBU LAL GUDARMAL Vs. STATE OF BIHAR

JUDGEMENT

(1.) In this case the Board of Revenue has submitted the following questions of law for the opinion of the High Court under Section 25 (3) of the Bihar Sales Tax Act :-

(2.) The petitioner is a firm called Debulal Gudarmal and carries on business in foodgrains, potato, sugar, oil-seeds etc. at Rafiganj in the district of Gaya. For the period from the 1st April, 1949, to the 31st March, 1950, the petitioner did not furnish quarterly returns nor produced his books of account. The Superintendent of Sales Tax therefore made assessment to the best of his judgment. The assessment order is dated the 2nd December, 1950. The gross turnover of the assessee was determined to be Rs. 11,51,890. The taxable turnover with regard to the linseed despatched outside the Province was determined to be Rs. 6,29,300. As regards the local sales, the taxable turnover was determined to be Rs. 1,80,000. Against the assessment made by the Superintendent of Sales Tax the assessee preferred an appeal to the Deputy Commissioner of Sales Tax who made an order of remand in the case. The assessee then took the matter before the Board of Revenue and on the 9th November, 1953, the revisional application was allowed in part. The assessee then applied to the Board of Revenue to state a case to the High Court on certain questions of law. The application was rejected by the Board of Revenue on the 25th October, 1954. The assessee then moved the High Court under Section 25(3) of the Bihar Sales Tax Act, and the Board of Revenue has now made a statement of case in accordance with the direction of the High Court on three questions of law which have been already referred to.

(3.) With regard to the first question the argument put forward by Mr. Tarkeshwar Prasad on behalf of the assessee is that there is no material to support the assessment made upon the assessee on the turnover of goods worth two lacs for local sale. The argument was that the assessee had no local sale at all and the entire business of the assessee consisted in despatching goods for sale outside the State of Bihar. It was argued that there was no material whatsoever for holding that there was any local sale on the part of the assessee. We are unable to accept the argument of learned counsel as correct. As we have already said the assessee did not file returns for the relevant quarters nor did he produce his account books though he was given several opportunities by the Superintendent of Sales Tax. It was pointed out on behalf of the assessee that the books of account were stolen but from the order of the Deputy Commissioner of Sales Tax it appears that the allegation was that the account books were stolen in January, 1951, but notice was served upon the assessee to produce the account books on the 20th August, 1950. In any case the fact remains that the assessee did not produce his books of account and so the Superintendent of Sales Tax was compelled to make assessment to the best of his judgment. We do not accept the argument of the assessee that the assessment of the Superintendent of Sales Tax is made upon no material so far as local sale is concerned. The assessment has been made in the first place upon the report of the Inspector printed at page 59 of the paper book. In this report dated the 10th February, 1950, the Inspector states that he saw the books of account, Rokar, Khata, Bilti Nakal and Nakal Bahi. He also notes that the dealer's Munib objected to take further extracts from the account books on the ground that the proprietor was absent. He further states in his report that "the dealer's gola is the biggest gola in Rafiganj Thana and deals in all kinds of food-grain, potato, tisi, groundnuts etc. and even despatches these articles outside the District". The Inspector has further stated as follows : "The dealer's non-co-operative attitude to explain his accounts clearly indicated that he has got some mala fide intention. Taking a most modest estimate of his monthly transactions, I estimate Rs. 30,000 as his average monthly gross turnover". In the assessment order the Superintendent of Sales Tax states that he paid a surprise visit to the business of the assessee on the nth August, 1950, together with two Inspectors, Babu Gopal Krishna Verma and Maulvi Akhtar Ali, and at the time of his visit the business of the dealer was going on in full swing. In the course of the assessment order the Superintendent of Sales Tax further states as follows :- But no books of accounts could be produced before us for examination nor could we have any access to his godowns to have an idea of his stock position, on the usual plea that the proprietor of the firm was out with the keys of the godown as well as of the almirah which contained the books of accounts belonging to the dealer. However we got hold of a few loose sheets of paper containing accounts of daily transactions and served a notice on the dealer to appear with his books of accounts on 28th August, 1950, at Gaya, On the date fixed the dealer failed to appear but sent a stamped petition for time by registered post on the ground of his illness. As this was the first petition for time the case was adjourned for nth October, 1950, and he was duly informed. On the date fixed a second petition for time was received again by registered post and the time prayed for was on the ground of illness of his son. In order to give the utmost opportunity to the dealer for the production of his accounts, the case was again adjourned to 2nd November, 1950. Meanwhile an Inspector was deputed for collection of the figures of despatches made by him or on his behalf from the different railway stations of Gaya District. A letter was also addressed to the Agent, Imperial Bank, Gaya, for furnishing a statement of deposits made by the dealer during 48-49 and 49-50. No action was taken by the dealer on 7th November, 1950, the date fixed for hearing. However a stamped petition for time was received again on 20th November, 1950, again on the ground of his illness. As more than reasonable time had already been allowed the petition was rejected and assessment of the dealer was completed under Section 13 (4) to the best of judgment.