TMI Blog1988 (3) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... vey dated 26th July, 1975 the assessee was found evading payment of due tax when its account books were seized ; sales and purchases were not verifiable and no stock register was maintained ; and lastly the assessee did not maintain its account books in terms of Section 12 (2) of the Act. 4. - Section 12 of the Act provides for maintenance of accounts by the dealers. Sub-section (1) of Section 12 says that every dealer shall keep and maintain a true and correct account showing the value of the goods sold and bought by him, and the accounts shall be maintained in an intelligible form, from which the value of goods sold and purchased by a dealer during a particular year may be determinable. 5. - In case of a manufacturer, who is liable to pay tax under the Act, sub-section (2) of Section 12 further requires that in addition to the accounts' maintained under sub-section (1), such dealer shall also maintain stock books in respect of raw materials as well as the products obtained at every stage of production. 6. In the instant case, the assessee is admittedly a manufacturer of oil. In terms of Section 12 (2) of the Act, the assessee was required to maintain stock books in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 63,870.84P. In terms of weight, oil produced by the assessee during the year quantity wise was as under : 1. Alsi oil ... 42.78 Quintals 2. Mustard oil ... 14.73 Quintals 3. Groundnut oil ... 163.32 Quintals. Total 226.83 Quintals However, taking the oil manufactured by the assessee at 366 quintals, the Sales Tax Officer determined the taxable turnover of oil at ₹ 2 lac and thereby, made addition of ₹ 1,36,829.16 n.p. to the disclosed turnover. This addition was confirmed in appeal by the Tribunal. 12. As regard the turnover of Tilhan (oil-seeds) the Sales Tax Officer held that the assessee was making purchases on its own behalf as well as on commission for others. He estimated the taxable turnover of such purchases at ₹ 2,50,000/- which was more or less a follow-up action, as a result of the addition made in the turnover of oil manufactured by the assessee. In appeal, the Tribunal reduced the turnover of purchases to ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of the asscssee, but once the suppression is found or the account books are rejected, the consumption of electricity becomes a relevant factor in making an estimate on best judgment. 18. The Madras High Court in the decision of Kalyani Oil Mills v. State of Madras, (1973) 32 STC 542, has held that the consumption of electricity can be a basis for making an estimate and observed as under : Once a 'best judgment' is called for the question is whether the Assessing Authority is justified in proceeding to make assessment on the basis of electricity consumption. It cannot be disputed that the consumption of electricity is one of the methods to find out the work done in the oil mill. Learned counsel for the assessee contends that the consumption of electricity in the mill cannot form a proper and accurate basis. That may be so. But in the absence of any other method to find out the actual production of oil etc., the calculation of turnover on the basis of consumption of electricity can also be adopted. 19. - From the above it is evident that on account of high consumption of electric energy in absence of any other defects in the account books, no additions can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Against this, the Sales Tax Officer, estimated the production of oil at 366 quintals, i. e. a little more than 1-1/2 times of the disclosed production of oil. The addition, if any, to the disclosed sales, could have been to the same extent or proportion. However, the addition made is to the tune of ₹ 1,37,000/- (approx) which is not in the same proportion as the addition in terms of weight. The Sales Tax Officer has disclosed no reason in his order for fixing the turnover at Rupees Two lacs, and how that figure was arrived at by him. The Sales Tax Tribunal has also not examined the case from this angle. 24. - The yield of oil depends upon various factors viz. quality of the seeds whether it was dry or moist, the nature of the electric supply and other similar factors. There may be several other disturbing factors, which affect the net yield of oil. The consumption of electricity itself is affected by various factors. 25. The main complaint of the assessee is that the production of oil has been determined by the tax authorities, without considering the factors which were relevant for production of oil, of which a mention has been made in the earlier paragraph. 26. Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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