TMI Blog1964 (7) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent returned a gross turnover of Rs. 90,099-10-3 and a net turnover of Rs. 70,505-6-8 claiming exemptions for the balance on the grounds which need not be set out here. The assessing authority discovered some discrepancies in the account books and therefore estimated the turnover at Rs. 1,22,456 on the 13th of July, 1956. Sometime later, on the 3rd September, 1957, there was a surprise inspection by the Special Commercial Tax Officer, who deals with tax evasions, and he seized and exercise book relating to credit sales. On verification it was found that several entries were not brought into regular account books which amounted to Rs. 37,800 for two and half months. It was also found that four pages were missing. The sales covered b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition to the tax assessed, a penalty not exceeding one and half times the tax due on the turnover that was not disclosed by the dealer in his turnover. (3) If no return is submitted by any dealer liable to tax under this Act before the date prescribed in that behalf, the assessing authority may, at any time within a period of four years from the expiry of the year to which the assessment relates, after issuing a notice to the dealer and after making such inquiry as he considers necessary, assess to the best of his judgment, the amount of tax due from the dealer on his turnover for that year, and may direct the dealer to pay, in addition to the tax so assessed a penalty not exceeding one and half times the amount of that tax. (4) Where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o tax turnover which has escaped assessment. That deals with a case where it is brought to the notice of the assessing authority that either due to the inadvertence of the department or the concealment of the assessee a part of the assessee's turnover has escaped assessment. The question that calls for determination in this case is whether the concept of best judgment could be imported into this sub-section also. Incontestably that power vested in the authority both under sub-sections (1) and (3). But does sub-section (4) also confer the same power on the department? It is necessary in this behalf to notice the difference in language between sub-sections (1) and (3) on the one hand and sub-section (4) on the other. The crucial words in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the authority under sub-sections (1) and (3). It seems to us that the Legislature has advisedly confined the power of the department to assessing such turnover as is shown to have escaped and did not extend it to estimates depending upon inferences to be drawn by the department from certain circumstances. We do not think that this subsection clothes the department with power to make a best judgment assessment. It is true that a judgment of a Division Bench of the Madhya Pradesh High Court in Commissioner of Sales Tax v. Kunte Brothers [1962] 13 S.T.C. 366., favours the view that is pressed upon us by the learned Government Pleader. Section 10 of the Madhya Bharat Sales Tax Act, 1950, which fell to be considered by the learned Judges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s done, it is for the assessee to satisfy that no turnover has escaped assessment or that the escaped turnover is of a certain magnitude." In support of the conclusion that a best judgment assessment was not excluded from the sweep and range of section 10, they relied on the observations of Danckwerts, J., in Rosette Franks Ltd. v. Dick (H.M. Inspector of Taxes) [1962] 13 S.T.C. 366. which are as follows: "It is perfectly true that this is only one incident, and the one incident only, which the Inspector of Taxes was able to establish before the Commissioners; but it was open to the Commissioners, as it seems to me, to conclude that this was not merely an isolated transaction but showed the kind of thing which was going on, and they were, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m to warrant the construction that is put upon that section. We therefore express our respectful dissent from the principle embodied in Commissioner of Sales Tax v. Kunte Brothers (1). It is unnecessary to labour this point any further as we feel that the conclusion is inescapable from the language of sub-section (4) of section 14 that best judgment assessment is confined to situations envisaged in sub-sections (1) and (3) and cannot be extended to sub-section (4). For these reasons, we feel that the order under revision cannot be interfered with. In the result the tax revision cases are dismissed with costs in T.R.C. Nos. 26 and 27 of 1963. Advocates' fee in each case Rs. 50. Petitions dismissed. - - TaxTMI - TMITax - CST, VAT & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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