Kania, J.@mdashThis is a reference, made at the instance of the department, u/s 23(1) of the C.P. and Berar Sales Tax Act, 1947. The question referred to us for our consideration is as follows :
"Having regard to the established principle of law that the books of account for the whole accounting year can be rejected if the accounts for a part of the year are unreliable, was the Tribunal, on the facts and in the circumstances of the case, justified in law in holding that no best judgment assessment could be made in respect of the part of the accounting year which pertains to the period subsequent to the date of the visit by the Sales Tax Officer to the respondent''s place of business ?"
2. The facts giving rise to this reference are as follows : The assessees were dealers in kirana, oil, grain, cloth, cereals and other commodities. The relevant year of assessment was from 24th October, 1957, to 11th November, 1958. On 20th February, 1958, the Sales Tax Officer paid a visit to the premises of the assessees and seized a kachchi rojmel. The said rojmel was written from 1st January, 1958, to 20th February, 1958. The Sales Tax Officer passed an order assessment against the assessees on 22nd February, 1960, wherein he, in substance, held that there was a discrepancy of Rs. 15,756 between the amounts as shown in the kachchi rojmel and the amounts as shown in pacci rojmel or rokad. The explanation of the assessees was rejected by the Sales Tax Officer and following the rule of three or rather the Sales Tax Officer''s version of the rule of three, he increased the gross turnover by Rs. 1,50,000. On an appeal by the assessees, the Assistant Commissioner of Sales Tax, by his order dated 23rd May, 1961, held that several items had been wrongly treated as suppressed sales by the Sales Tax Officer and after eliminating the entries relating to such items it was found that the transactions of sales amounting to Rs. 8,042-1-0 were still not found accounted for in the fair books. In view of this he held that the addition of Rs. 1,50,000 on account of evasion of sales was excessive and reduced the enhancement to 25 per cent of the sales disclosed in the books of account. He further imposed a penalty of Rs. 1,000. The assessees preferred a second appeal against this order, which failed so far as the question of enhancement was concerned, but a sum of Rs. 5,000 was allowed in this second appeal on account of sale of tax-free goods. The assessees then went in revision to the Tribunal. The Tribunal by its judgment and order dated 20th July, 1964, has observed that the discrepancy of Rs. 8,042 related to about fifty days and the lower authorities had based the enhancement on the rule of three and on the footing that the enhancement should be calculated on the basis of 365 days of the year. The Tribunal held that it would be wrong to base the assessment of this footing after 20th February, 1958, when the kachchi rojmel was seized, and observed that it would have to be assumed, unless contrary was proved, that after 20th February, 1958, the pucca accounts maintained by the assessees were correct but that the estimate made was correct so far as the period prior to 20th February, 1958, was concerned.
3. Mr. Dada, the learned counsel for the applicant, has submitted that if the accounts of the assessees are maintained annually, although the discrepancy related to a part of the accounting period, the assessment for all the four quarters relating to the accounting period can be reopened. In support of this contention, Mr. Dada relied upon the decisions in the State of Orissa v. Kundanlal Juala Prasad [1974] 34 S.T.C. 501 and Augustine & Co. v. State of Kerala [1975] 36 S.T.C. 257. In our view, it is unnecessary to deal with these cases, as the question framed by the Tribunal itself clearly shows that the principle that the books of account for the whole accounting year can be rejected even if the accounts for a part of the year are unreliable has been taken by the Tribunal as the established principle of law, with which there is no quarrel. The facts and circumstances of the case show that on 20th February, 1958, there was a visit paid to the premises of the assessees by the Sales Tax Officer and the kachchi rojmel was seized. Without stating so in express terms, the judgment and order of the Tribunal makes it quite clear that the Tribunal has proceeded on the footing that, in view of this seizure, after 20th February, 1958, the assessees would probably have maintained regular and proper books of account and there was nothing on the record of the case to show to the contrary. We fail to see how it could be said that the Tribunal has committed any error in coming to this common-sense conclusion. If there had been any material which indicated that even after 20th February, 1958, the assessees had continued to suppress sales, the Tribunal might have as well come to a contrary conclusion. In our view, the conclusion arrived at by the Tribunal is correct.
4. In the result, the question referred to us must be answered in the affirmative. In view of the fact that the assessees are not appearing, there will be no order as to costs.
5. Reference answered in the affirmative.
