TMI Blog1952 (1) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales Tax Officer has dealt with the case elaborately in his assessment order for the 1st quarter in question: Ex. A. The assessee then moved the Commissioner of Sales Tax, Tirhut Division, in appeal on 6th December, 1947. These petitions are marked Exs. B, B1, B2, B3, B4, B5 and B6. The learned Commissioner of Sales Tax, Tirhut Division, by his order dated 23rd February, 1948, (Ex. C) dismissed the appeals as in his opinion the assessee was found guilty of adopting dishonest devices and suppressing real accounts. The assessee then moved the Board of Revenue in revision. The petitions are marked Exs. D, D1, D2, D3, D4, D5 and D6. The Board by its order dated 31st July, 1948, (Ex. E) summarily rejected the peti- tions against the concurrent findings of the courts below on questions of fact. The assessee then moved the Board again on 26th October, 1948, with the request to refer the case to the Honourable High Court on the following two questions of law. The petitions are marked Exs. F, F1, F2, F3, F4, F5 and F6. Question (a).-Whether under the provisions of the Sales Tax Act the assessee was precluded in the circumstances of the case from challenging the findings of fact arrived a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be patently flimsy and do not clear the appellants of the charge that they have been persistently maintaining false accounts with a view to defraud the Sales Tax Authorities. These detections relate only to some of the quarters concerned in the appeal and not to all and similarly it is also true that the silver received on 29th April, 1947, and 2nd May, 1947, had not been sold. But they do not affect the issue. What has been clearly revealed is that the appellants were continually engaged in the dishonest practice of suppressing some of their transactions from their account books, and for this purpose they adopted more than one device even going to the sinful extent of dispos- ing of some of the silver as having gone to the temple. In these circum- stances the learned Sales Tax Officer was quite justified in holding the entire account for all the quarters concerned as false and unreliable and for making determination according to the best of his judgment for each and every one of these quarters. As regards the determinations made by him having regard to the account books and returns submitted and having regard to the suppressed transactions which came to light from only a few inci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Revenue has reported that the assessee firm was "continually engaged in the dishonest practice of suppressing some of their transactions from their account books, and for this purpose they adopted more than one device even going to the sinful extent of disposing of some of the silver as having gone to the temple."The Board of Revenue thinks that in such circumstances the Sales Tax Officer was justified in rejecting the entire account for all the quarters concerned as false and unreliable and "in making determination according to the best of his judgment for each and every one of these quarters." The Board of Revenue was not inclined to hold that there had been any gross over-assess- ment. Before I answer the question formulated I should like to point out in brief as to how the assessment with regard to each of these quarters was made. With regard to the first quarter, which is the quarter 1-10-1945 to 31-12-1945, the dealer did not furnish any return and he produced his books of account in response to the notice issued to him under Section 10(4) of the Act. The books of account showed a gross turnover of Rs. 72,762 only, and the Sales Tax Officer made the assessment on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , though the return showed a gross turnover of Rs. 48,519-15-0 only. The papers produced were found to be unreliable and the return was not accepted as correct. With regard to the quarter 1-1-1947 to 31-3-1947 and the quarter 1-4-1947 to 30-6-1947 the assessment was made under Section 10(4) of the Act, after the accounts were found to be incorrect, the assessment with regard to these two quarters having been made on the gross turn- over of Rs. 3,00,000 and Rs. 4,00,000 respectively. The dealer has no case whatsoever so far as the first, the sixth and the seventh quarters are concerned with regard to which the assessment was made under Section 10(4) of the Act. The principles laid down by the Judicial Committee in Commissioner of Income-tax, United and Central Provinces v. Badridas Ramrai Shop(1) would apply so far as these assessments are concerned. Their Lordships observed as follows in this case: "Their Lordships find it impossible to extract these requirements from the language of the Act, which after all is, in such matters, the primary and safest guide. The officer is to make an assessment to the best of his judgment against a person who is in default as regards (1) [1937] 5 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at it is not necessary to arrive at any satisfactory conclusion upon that matter, because it is not a matter with which the Court is con- cerned. If the Act of Parliament says the amount of profits is to be ascertained, ascertained they must be whether that can be done in a satisfactory method or not." (1) [1931] I.L.R. 9 Rang. 281. In this case the several orders of the Sales Tax Officer very clearly go to show that this dealer had resorted to several dishonest devices. Mr. A.B.N. Sinha who appeared before us on behalf of this dealer made a grievance that the assessing officer referred to the accounts of previous years for coming to the conclusion that the accounts submitted for these quarters were not correct and that the import of bullions had not been shown in the papers. In the order with regard to the first quarter 1-10-1945 to 31-12-1945 there is men- tion of the accounts of 1353 Fasli, and it is noted that the purchases of silver were not recorded in the purchase account book of the dealer but "had been carried underground by showing in the account of temple." I need hardly repeat that if the assessing officer is not satisfied with the account, then after following the proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of Section 13 of the Act. As was pointed out by a Full Bench of the Madras High Court in Gunda Subbayya v. Commissioner of Income-tax, Madras(1), Section 13 adds nothing to and takes nothing away from Section 23(3) and that all that the section says is this that if the method of accounting employed by the assessee is a method which does not properly disclose the in- come, profits and gains of the assessee, the Income-tax Officer can adopt his own method. In Commissioner of Income-tax, Bombay v. Sarangpur Cotton Manufacturing Co. Ltd.(2), their Lordships of the Judicial Committee observed that the section relates to a method of accounting regularly employed by the assessee for his own purposes and does not relate to a method of making up the statutory return for assessment to income-tax. Their Lordships further pointed out that the section clearly makes such a method of accounting a compulsory basis of computation unless, in the opinion of the Income-tax Officer, the income, profits and gains cannot properly be deduced therefrom and that it is mis- leading to describe the duty imposed on the Income-tax Officer under the proviso to Section 13 as a discretionary power. In the face ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee or after considering such other evidence as the Income-tax Officer may require on specified points. As was observed by their Lordships of the Allahabad High Court, it is to some extent a private inquisition, it is confidential, it is not sup- posed to be disclosed to the public, and it is certainly not open to review especially because frequently the Income-tax Officer is com- pelled to draw inferences and to consider evidence which might not be justified by the Evidence Act. I respectfully agree with the obser- vation of a well-known Judge in England, quoted with approval in this Allahabad case, that there is no rule of law compelling a judge to accept evidence, even though it is uncontradicted, which he believes to be a pack of lies, and similarly, if the Income-tax Officer makes fair observation of his own in an honest attempt to arrive at a decision, he is perfectly justified in doing so and in acting upon it. I further agree with their Lordships' view that the sooner it is understood that these are questions of fact the better it is and that the application to state cases must be discouraged in matters which, on ultimate analy- sis, are really only questions of a fair ..... X X X X Extracts X X X X X X X X Extracts X X X X
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