TMI Blog1991 (1) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... the accounting year commenced on October 22, 1979, the Commissioner held that the actual discovered escapement should be the basis to estimate the escaped turnover for the period from the date of commencement of the accounting year till the date of the discovery of escapement. For this he relied on the decision of the Supreme Court reported in Commissioner of Sales Tax v. H.M. Esufali H.M. Abdulali [1973] 32 STC 77. The appellate authority had, while partly reversing the order of the assessing authority, held: "The argument of the learned counsel has some force and deserves consideration. The assessing authority has not pointed out any omission in the books of accounts after the date of inspection. In the absence of any material to show t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for sales. The appellant had stated that he would produce the 'Nond book' for verification if the assessing authority desired to verify it again while furnishing the replies to form 31A. However, the assessing authority did not look into it again and overruled the objection stating that no such book was produced before the inspecting authorities on the day of inspection. As the jaggery received from principal has been recorded in Nond book and the same was disposed of on December 22, 1979, as selling commission agent paying taxes thereon, levy of tax on the value of 289 bags of jaggery again is unwarranted and amounts to double taxation on the same transaction. As such levy of tax on jaggery amounting to Rs. 34,680 is illegal and therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on found in the bills (i.e., Rs. 74,852.26). As against this, the Commissioner held that, the said figure should be the basis to estimate the disallowance for the entire period from the commencement of the accounting year. The Commissioner thought that the decision of the Supreme Court in H.M. Esufali's case [1973] 32 STC 77 lays down such a principle. This is not a correct appreciation of the Supreme Court's decision. The Supreme Court held that in the case of a best judgment assessment guess-work is inevitable and so long as the guess-work is reasonable and has a nexus to the facts discovered, the best judgment assessment cannot be held to be illegal. At page 81, it was held: "The assessee has neither pleaded nor established any justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that, the method adopted by the appellate authority was erroneous and prejudicial to the interest of the Revenue? The fact that another method could have been adopted by the appellate authority, cannot be held to be erroneous. "Error" here, should be an error in approach, error in computation, error in applying the relevant law or facts, or error in selecting a principle which would not govern the fact situation; arbitrary exercise of the appellate power certainly would fall within the scope of section 22A. By resort to a different method, a larger tax can be levied and collected cannot be the sole consideration to attract section 22A, as prejudicial to the interest of the Revenue, unless, the said method is the only mode legall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight set a bad trend or pattern for similar assessments, which on a broad reckoning, the Commissioner might think to be prejudicial to the interests of Revenue administration. There might be cases where the Commissioner might wish to interfere with an order of the Income-tax Officer in order to safeguard the fair name and reputation of the Income-tax department without any thought of going into the particular aspects of the assessment. Assessments which are mala fide politically and communally motivated may be, however, set aside as being prejudicial to the interests of the Revenue. It is unnecessary for us to illustrate the point any further. All that we wish to observe is that the scope of the interference under this section is not to set ..... X X X X Extracts X X X X X X X X Extracts X X X X
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