STATE OF RAJASTHAN Vs. TARACHAND GUPTA

JUDGEMENT

(1.) THIS reference has been made to this Larger Bench by a learned single Bench in the following circumstances: - The non-applicant is a dealer under the Rajasthan Sales Tax Act. The Commercial Taxes Officer, Survey & Investigation, Ajmer found certain account books in which the dealer having made sales on credit did not show them during his assessment for the year. Consequently after observing the necessary formalities, the assessing authority concluded that a certain net taxable turnover had escaped assessment on which additional tax was levied by recourse to best of judgment assessment. A penalty was also levied for evasion of tax. On appeal to the Deputy Commissioner (Appeals) he held that in matters of escapement of turnover from sales tax a best judgment assessment was not permissible under the law and that in such cases the assessing authority must find out the actual turnover which had escaped assessment. For this he relied upon the case of Messrs Radhey Shyam Bakery Ajmer vs. State reported in 1968 RRD 417. He, therefore, set aside the assessment order and remanded the case to the assessing authority for disposal in accordance with law with the direction to find out the actual turnover which had escaped assessment. The State came up in revision against this order and it was heard ex-parte.

(2.) THE learned single Bench was of the opinion that in the facts and circumstances of the case the best judgement assessment made by the assessing authority was reasonable and proper and that on the material available to him it was not possible for him to find out the actual turnover which had escaped assessment as the necessary material on which the actual turnover could have been calculated was not produced by the dealer. As mentioned by the learned single Member (Shri S. P. Mathur) the only question that requires consideration is whether a best of judgment assessment in a case of escaped turnover is permissible under the law. He has observed that the rule in 1968 RRD 417 undoubtedly supports the view of the learned Deputy Commissioner (Appeals ). In this case the judgment discussed the rulings of the various High Courts on the point at issue available to the Court when it delivered judgment on 4-11-66. THE learned single Member has, however, not expressed any opinion on the correctness or otherwise of the view taken in the said judgment because an Explanation was added to sec. 12, Sales Tax Act 11 of 1969 after delivery of the judgment which in his opinion requires the matter to be reconsidered afresh. He, therefore, referred the following question to this larger Bench: - "what is the effect of the Explanation added to sec. 12 of the Rajasthan Sales Tax Act, 1954 by Act 11 of 1969 ? Would it be permissible under the law for the Assessing Authority to make a best judgment assessment in cases falling u/sec. 12 ? Will such best judgment assessment be permissible even in respect of cases relating to the period prior to Act No. 11 of 1969?"