TMI Blog1991 (7) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable turnover for the year 1979-80 worked out to Rs. 15,31,088.91 and Rs. 7,61,739.49, respectively. The sales of glass sheets and mirrors are for an amount of Rs. 7,48,349.42 and second sale of car at Rs. 21,000. The assessing authority found that the accounts disclosed gross loss in trade during the year while the gross profit in respect of second sales of glass was worked out at 41 per cent. The assessing authority also found that the assessees did not maintain any separate account for the local and inter-State purchases of goods during the year under assessment though they had purchased goods from dealers outside the State as well as locally. On the best of judgment, the assessing authority, therefore, determined the turnover taxabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was not justified. The Appellate Assistant Commissioner, however, found that the defects pointed out by the assessing authority, viz., (a) that the dealers did not maintain stock register and were not in a position to give details of the source of the purchases of the goods sold in other States, and (b) that the gross profit for second sales was huge and gross loss and had been shown in the trade justified the assessing authority resorting to best of judgment assessment in the case. However, so far as the quantum of addition made by the assessing authority was concerned, the taxable turnover was reduced by a sum of Rs. 69,000 on the ground that compounding fee had been paid for the consignment which had been subjected to check by the Rovi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is there any separate detailed stock accounts kept. In these circumstances the authorities have no alternative but to make a reasonable best judgment assessment of the taxable turnover. The learned authorised representative for the appellants in the course of the arguments gave a working sheet that at any rate the estimate of taxable turnover could be Rs. 8,47,828 only. We have gone through this working but find it not fully acceptable. However, we find some force in the contentions of the appellants that the gross profit estimated at 30 per cent by the assessing officer is somewhat excessive and the goods purchased from outside the State will normally be preferred for inter-State sales in view of the varying rates of tax. Having regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him appears to the assessing authority to be incomplete or incorrect, the assessing authority shall, after making such enquiry as it may consider necessary, assess the dealer to the best of its judgment: Provided that before taking the action under this sub-section the dealer shall be given a reasonable opportunity of proving the correctness or completeness of any return submitted by him." On a plain reading, this sub-section provides for best judgment assessment in the following cases: (a) failure to submit return within the prescribed period or (b) where the return submitted is incomplete or incorrect. In either case, the assessing authority can assume jurisdiction under section 12(2) of the Act to proceed to assess to the best of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on has at all been pointed out. As a matter of fact, no finding has been recorded by the assessing authority to the effect that the return filed by the assessee is either incomplete or incorrect. Without rejecting the accounts and the return the assessing authority cannot take recourse to best of judgment assessment. It depends upon the facts and circumstances of each case as to whether the mere non-maintenance of the account books can lead to any inference that the return is incomplete or incorrect and that question has to be considered in every case where this point arises and the assessing authority has to come to a conclusion, after taking all these factors into consideration, that the return is incomplete and the accounts incorrect whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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