2023 (1) TMI 446 - HC - CST, VAT & Sales Tax
Rejection of books of accounts of assessee - enhancement of turnover - higher consumption of electricity during the period 01.01.2008 to 31.03.2008 - HELD THAT:- This question has been directly and indirectly under consideration of this Court as well as Hon’ble Apex Court for a long time. The Division Bench of this Court in MAHABIR PRASAD JAGDISH PRASAD, VARANASI VERSUS COMMISSIONER OF SALES TAX, UP. [1970 (7) TMI 71 - ALLAHABAD HIGH COURT]was of the view that high consumption of electricity may be a circumstance justifying action under Section 21 of U.P. Sales Tax Act, 1948, but, the Court was of the view that high consumption of electricity by itself is no material for rejecting the books of accounts of the Assessee. The judgment of Mahabir Prasad Jagdish Prasad was followed by another Division Bench in MAHASHAKTI OIL MILL VERSUS COMMISSIONER, SALES TAX, UP., LUCKNOW [1972 (1) TMI 91 - ALLAHABAD HIGH COURT]wherein the proceedings were under Section 21 of Act of 1948 and the Court was of the view that if no material was brought by the taxing authorities on record, there was no justification for rejecting the books of accounts.
The said judgment was subsequently followed in M/S SUNITA ISPAT PVT. LTD. VERSUS THE COMMISSIONER, COMMERCIAL TAX [2016 (11) TMI 131 - ALLAHABAD HIGH COURT]and the Court found that excessive electricity consumption cannot be a ground for rejection of books of accounts.
In the case in hand, there is no denial of the fact that for nine months starting from 01.04.2007 to 31.12.2007, the total electricity consumption was 8,55,375 and total grinding of wheat, which was done, was 96760.05 quintals, while for the remaining period i.e. 01.01.2008 to 31.03.2008, only 8791.14 quintals of wheat was grinded consuming 1,83,625 units of electricity, which comes to 20.887 units of electricity per quintal compared to the earlier period, where the consumption was 8.840 units per quintal. The difference between consumption of electricity for the period 01.4.2007 to 31.12.2007 and 01.01.2008 to 31.03.2008 is about 2.5 times high, for which justification given by the Assessee to the extent of electricity being consumed by the officials at their residential premises for running Air Conditioners, fans and light, cannot be accepted, as the period for which explanation has been given is the winter time when there is no use of Air Conditioners and the domestic consumption cannot be believed on such a higher side.
Thus, it is apparent that the Assessing Authority had rightly rejected the books of accounts on the basis of high consumption of electricity after dealing with each aspect of the case and recording a categorical finding as to the production of flour made from the wheat during the relevant period of assessment year in question. The earlier Division Bench and coordinate Bench of this Court had only held that rejection of books of accounts cannot be done on the basis of high consumption when there was no material on record. However, in the present case, the Assessing Authority has demonstrated how the electricity was consumed by the Assessee during the period 01.04.2007 to 31.12.2007 and 01.01.2008 to 31.03.2008 when the production did not increase but only the consumption was high.
There are no ground for interference is made out in the order of Tribunal. Both the revisions lack merits and are hereby dismissed.