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2016 (10) TMI 783 - HC - VAT and Sales TaxAssessment for the years 2005-06 and 2006-07 - dealer in iron and steel - goods purchased from Punjab and then consigned to U.P. - circular referable to the provisions of Section 8-C (3) (a) of the U.P. Trade Tax Act - the importers of steel to furnish security before obtaining the requisite import declaration forms - Held that - While the order of assessment itself carries a recital to the effect that the statement of accounts and relevant books had been produced and upon enquiry it was found that the sales and purchases had been correctly reflected and accounted for therein the assessing authority curiously then proceeded to record that only computerized accounts were produced for his consideration. Obviously the two are self contradictory. The Tribunal has also proceeded on the basis that the assessing authority had not recorded any satisfaction in respect of the transactions having been duly accounted for in the relevant books of accounts. It is on this basis that it has proceeded to hold that the assessing authority was clearly justified in rejecting the books of accounts. The Court then further finds that in both the assessment years the amount of escaped turnover has been increased without reference to any material or record in support thereof. While it is true that a best assessment judgment undertaken by the assessing authority would necessarily entail a certain degree of guess work the same cannot be used as a licence by the assessing authority to not base his estimation on any material at all. The guess work which needs to be employed in such circumstances must obviously be reasoned and referable to some empirical or contemporaneous material that exists or may be found by the assessing authority. The exercise in the opinion of this Court so undertaken by the assessing authority cannot depart from being one which is logical and fair - issue of rejection of books of account as well as estimation of actual turnover merits Remand - matter remanded. Levy of penalty - this court finds that the circular of the Commissioner by itself made a provision for situations like the present which stand raised in these revisions. The circular itself envisages a situation where an importing dealer incorrectly computes the security which was liable to be paid on the goods. It accordingly granted him the facility of depositing the balance amount due and payable at the time of entry of goods at the check post. The short fall if any in deposit of security was also liable to be taken into consideration while computing the ultimate tax liability of the assessee and while arriving at the correct figures of taxable turnover. The difference itself as has been pointed out by the learned counsel for the revisionist worked out to Rs. 200/- per metric ton and as per Sri Agrawal would have resulted in a liability of not more than Rs. 262/-. This being the only ground and reason which weighed with the assessing authority for levying penalty upon the revisionist cannot be sustained. The orders imposing penalty are therefore liable to be set aside. Revision allowed - assessment proceedings remanded - levy of penalty decided in favor of revisionist - decided partly in favor of revisionist.
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