TMI Blog1977 (10) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... the two appeals in respect of assessment under the State of Central Acts will also be decided together. 2. The facts briefly are that appellant deals in gains, oil seed and forest produce and was assessed to tax under the State Act as well as the Central Act for the period 17th Nov., 1963 to 7th Aug., 1964, vide assessment order dt. 30th Jan., 1965. The order was passed ex-parte. Appellant had shown a gross turnover of Rs. 1,41,439.72 in the returns. The entire sale was said to be within the State of Madhya Pradesh. The assessing authority observed that the dealer had done considerable business in other names which was not shown in his account books. The basis for this finding was certain Hundi transactions made through the agency of two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that he had done business in the name of his own firm only (Tularam Suresh Kumar), the other business relating to the Hundi transactions mentioned was also filed from the firm of Atmaram Ramswarup situated at Karanjia, District Mandla, in which it was affirmed that Hundi mentioned against Atmaram Ramswarup, Srikrishna Agarwal and Arunkumar Agarwal concerned the business of the firm of Atmaram, and had been duly entered, in the accounts of that firm. Similarly Hundis entered in the name of Shrikrishna Agarwal, Arunkumar Agarwal and Atmaram Ramswarup in the accounts of Rampratap Bhimraj related to the business of Atmaram Ramswarup and were entered in the accounts of that firm. This firm was also registered under the State Act and had been ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he absence of these enquiries the acceptance by the assessing authority of the turnover shown in the books of account of the dealer was erroneous and hence sought to be revised under s. 39(2) of the State Act. It was represented before the Addl. CST that the different persons in whose names the transactions of sale appeared were all registered dealers for the last two years in Mandla and, therefore, the sales had rightly been excluded from the turnover of appellant. The Addl. CST rejected this contention observing that the mere fact that these dealers were registered, was not sufficient. He further observed that the persons exporting goods outside the State were close relations of the partners constituting the appellant s firm and, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business. The assessing authority had found no reason to reject their testimony. The assessing authority had also given a specific finding that the complaint made against the appellant was baseless. The Addl. CST, however, decided to revise this order though there was no justification to do so. There was no material to support his finding that the order of the assessing authority was erroneous. The order rested purely on the presumptions of the original assessing authority, whose ex-parte order had been set aside. 6. There is force in this contention. The original assessment was made ex-parte without valid notice to the dealer and was, therefore, set aside. Being set aside, this assessment does not exist. Thereafter, the assessing authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant s business. No enquiry has really been conducted to show that they related to his business. No enquiry has really been conducted to show that they related to his business. The position thus is that appellant was initially assessed on the basis of certain evidence which had been adduced behind his back. The ex-parte assessment was set aside. Thereafter, the assessing authority examined these accounts and also examined certain evidence in the shape of affidavits furnished by him. It accepted this evidence apparently without careful scrutiny, and made an assessment based on the accounts of the dealer. The Addl. CST desired to revise it evidently because the tax assessed now was very much less than what was assessed before. But, no enquiry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was accepted without scrutiny of the accounts of their dealers. Considering all the circumstances the proper course would be to remand the case to the assessing authority with the direction that further enquiry should be conducted and the assessment cases as well as the accounts of the concerned dealer, who now claim that the Hundi referred to their business, be examined with a view to decide whether this business relates to appellant or other dealers. The two Hundi dealers should also be examined in the presence of appellant and he should be given an opportunity to cross examine them and to adduce evidence in his defence. The assessing authority has to conduct a searching enquiry into these transactions and give a specific finding regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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