TMI Blog2008 (4) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... hase or sales suppression, whether it is local or inter-State, the assessing officer is free to reject the books of account and proceed for estimation of turnover in accordance with the principles laid down in section 17(3) of the Act and the law declared by High Courts and Supreme Court. Since the petitioners have raised other issues particularly the reasonableness of the additions, we feel the cases should go back to the Division Bench for considering these issues. We accordingly remit the cases to the Division Bench for decision on other issues consistent with the law declared above. - 125,219 of 2004 - - - Dated:- 11-4-2008 - DATTU H.L. C.J. AND RAMACHANDRAN NAIR C.N. AND JOSEPH K.M. , JJ. ORDER:- The order of the court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a [2008] 11 VST 419; [2004] 12 KTR 215 and C.O. Varghese v. State of Kerala [2008] 11 VST 149; [2004] 12 KTR 528 and contended that addition on account of unaccounted inter-State purchases should be limited to the actual suppression noticed and no further addition or estimation is possible. However, the Division Bench while hearing these cases did not agree with the view expressed by the other Division Benches in the above two decisions, because those decisions virtually direct the assessing officer to accept the books of account, except in regard to actual suppression found by the Department. The Division Bench accordingly referred the matter for consideration by a Full Bench. We have heard all counsel appearing for the petitioners and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by virtue of the two decisions of the Division Benches above referred, the Department is bound to accept the books of account of the dealer except in regard to actual purchase suppression found by the Department. The Special Government Pleader further pointed out that there are ever so many channels through which goods reach the State and there is no presumption that all goods received by a dealer reach the State through road over which there is check-post and that the goods get accounted therein. In answer to this, counsel for the petitioners contended that barricades are installed at the road check-posts and all goods reaching the State are entered in the checkpost registers and it is open to the assessing officer to verify check-post rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es or purchases in the course of export or import and in respect of inter-State sales or purchases . It is therefore the duty of a dealer to keep full and complete accounts of his entire transactions and returns filed based on accounts will be accepted only if accounts are found to be true, correct and complete. Section 17(2) of the Act provides for acceptance of returns only if the assessing authority is satisfied that the return is correct and complete. The correctness or completeness of a return is tested against the accounts and if the accounts are found to be incomplete, then the return loses its credibility and the duty in that case for the assessing officer is to adopt the procedure under section 17(3) of the Act, that is to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reliable materials and make assessment relying on the same. In fact there are ever so many decisions both of this court and the Supreme Court giving guidelines on best judgment assessment. The Supreme Court in Commissioner of Sales Tax v. H.M. Esufali, H.M. Abdulali [1973] 32 STC 77 held that the assessing officer while making best judgment assessment no doubt should arrive at his conclusion without any bias and on rational basis. The Supreme Court further added that the assessing authority should not be vindictive or capricious and assessment should be made on a bona fide estimate and on rational basis. While these are the principles laid down by the Supreme Court for the assessing authority to make best judgment assessment under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts are found to be incomplete or incorrect on account of material defect found by the Department, such as purchase or sales suppression, whether it is local or inter-State, the assessing officer is free to reject the books of account and proceed for estimation of turnover in accordance with the principles laid down in section 17(3) of the Act and the law declared by High Courts and Supreme Court. Since the petitioners have raised other issues particularly the reasonableness of the additions, we feel the cases should go back to the Division Bench for considering these issues. We accordingly remit the cases to the Division Bench for decision on other issues consistent with the law declared above. - - 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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