Delhi Sales Tax Act, 1975 the Delhi Value Added Tax, 2004 - No explanation was offered to show that the random sample of sale for two days not correct - Sweet shop - No accounts were maintained for selling of small quantity - two days sale of small quantity was taken as a random sample - levied tax and penalty for difference in books and actual sales - No proper explanation was given like only in holidays and festivals small sales would raise than the ordinary days and as such the random sample is not correct for levying Tax and penalty - Apex court dismissed the appeals =
The appellant - assessee has been registered under the Delhi Sales
Tax Act, 1975 (hereinafter referred to as the ‘Act’) as well as under the
Delhi Value Added Tax, 2004 and is carrying on the business of manufacture
and sale of sweets, namkeens and other eatables. On 9th March, 2000 and
10th March, 2000, officers from the office of the Commissioner of Sales Tax
had visited business premises of the appellant-firm and had recorded
statements of partners of the appellant-firm and had also checked total
cash inflow on those days. =
We do not find any substance in the submissions made on behalf of the
appellant-assessee and therefore, we are not inclined to allow the appeals
for the reasons stated hereinbelow :
(i) The appellant-assessee is making and selling sweets, namkeens
and other eatables. It appears from the record that when an
individual customer was buying eatables of a nominal value, possibly
bill was not being issued. There was no specific method whereby each
and every receipt from the buyers was recorded by the assessee. In
the aforestated circumstances, possibly due to some doubt, which might
have arisen, a special search or inspection was made on 9th and 10th
March, 2000 and total sale proceeds had been meticulously recorded and
calculated, which have been stated hereinabove. On the basis of the
receipts of those two days, considering them as a representative
sample, the Assessing Officer had come to a conclusion that the sale
proceeds or sales of the appellant-assessee for the year should have
been a particular amount and, in fact, the amount reflected in the
books of accounts was much less than the calculations arrived at by
the Assessing Officer.
(ii) It is pertinent to note that the Assessing Officer did not jump
to a conclusion without any rhyme or reason. The Assessing Officer
had called upon the assessee to explain the difference but the
assessee could not or did not give sufficient explanation as to how
the total sale on the basis of the average daily sale arrived at by
the Assessing Officer was not correct. One can very well presume that
in case of a dealer dealing in eatables, and specially sweets and
namkeens, on a particular day like a holiday or on account of some
festivity, total sale can be more than other days. For example, sale
would normally be more on Saturdays, Sundays and other holidays
because more people would be visiting such eateries. In the instant
case, had those two days, when business premises of the assessee was
inspected and the sale proceeds were recorded, been some special days,
the assessee could have placed those special facts before the
Assessing Officer, but nothing of that sort was done. In the
circumstances, in our opinion, the Assessing Officer had rightly come
to the conclusion that the books of accounts maintained by the
assessee were not showing correct sales and therefore, the conclusion
arrived at by him cannot be said to be incorrect. There was a
reasonable basis for him to arrive at the said conclusion, especially
when the assessee did not offer any satisfactory explanation in spite
of issuance of notice.
(iii) The submission made by the learned counsel appearing for the
appellant-assessee that no notice was issued, as required under the
Act, before framing the assessment is also not correct. The
assessment orders refer to notices issued to the assessee and they
also record the fact that no satisfactory explanation had been offered
by the appellant-assessee to make out a case that there was some
special reason for which sale of sweets, namkeen etc. on 9th and 10th
March, 2000 was exceptionally more.
(iv) Once the Assessing Officer had rightly come to the conclusion
that the books of accounts were not properly maintained and were not
reflecting each and every transaction, in our opinion, the Assessing
Officer had rightly come to a conclusion that total possible sale was
much higher and the conclusion so arrived at was based on sound
reasons. We also do not agree with the learned counsel for the
assessee that proper adjustments regarding sales tax had not been made
by the Assessing Officer in the process of the assessment.
(v) Once it is found that with some oblique motive, effort was made
to show lesser sale proceeds than the actual, the orders imposing
penalty can not be questioned. We are, therefore, not inclined to
interfere even with the quantum of penalty.
13. For the aforestated reasons, in our opinion, the impugned judgment
delivered by the High Court is just and proper, which does not require any
interference and therefore, the appeals are dismissed with no order as to
costs.
2014 (April.Part) judis.nic.in/supremecourt/filename=41401 ANIL R. DAVE, DIPAK MISRA
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs. 4465-4468 OF 2014
(Arising out of SLP (C) Nos.22912-22915 of 2009)
M/s Nathu Ram Ramesh Kumar … Appellant
Versus
Commr. of Delhi Value Added Tax … Respondent
J U D G M E N T
Anil R. Dave, J.
1. Leave granted.
2. Being aggrieved by the judgment delivered by the High Court of Delhi
in STC Nos.1 and 2 of 2008 and CM Nos.2161 and 2162 of 2008, these appeals
have been filed by the appellant assessee. The assessee has been aggrieved
by the assessment orders as well as the orders of penalty. As both the
appeals pertain to the assessee-appellant, at the request of the learned
counsel, they were heard together.
3. The facts giving rise to the present litigation, in a nutshell, are
as under :
The appellant - assessee has been registered under the Delhi Sales
Tax Act, 1975 (hereinafter referred to as the ‘Act’) as well as under the
Delhi Value Added Tax, 2004 and is carrying on the business of manufacture
and sale of sweets, namkeens and other eatables. On 9th March, 2000 and
10th March, 2000, officers from the office of the Commissioner of Sales Tax
had visited business premises of the appellant-firm and had recorded
statements of partners of the appellant-firm and had also checked total
cash inflow on those days. On those two days, sale proceeds were
Rs.2,13,974/- (Rupees two lac thirteen thousand nine hundred and seventy
four only) and Rs.1,98,009/- (Rupees one lac ninety eight thousand and nine
only) respectively.
At the time of assessment for the Assessment Year 1999-2000, it was
found by the Assessing Officer that the assessee had not shown its income
correctly and therefore, the Assessing Officer had taken into account the
facts gathered on the aforesaid two days for the purpose of assessing total
sales. On the basis of the gross receipts of sale effected on the
aforestated two days, average receipts per day had been calculated and the
Assessing Officer had come to a conclusion that the sale proceeds of the
assessee for the relevant year was Rs.7,51,86,350/- (Rupees seven crore
fifty one lacs eighty six thousand three hundred and fifty only). Before
coming to the said conclusion, the assessee was given an opportunity to
explain its books of accounts, as there was substantial discrepancy between
the receipts shown in the books of accounts and the gross receipts which
were actually found on the aforestated two days. It was, prima facie,
believed by the Assessing Officer that the assessee had not given accurate
details about the gross receipts.
Similarly for the Assessment Year 2000-2001, on 24.10.2000 also there
was a surprise visit to the place of business of the appellant-assessee and
even on that day it was found by the officers that there was discrepancy in
cash on hand and cash as per books of accounts. Moreover, they also found
that there was discrepancy in stock as the actual stock and stock as per
books of accounts were not same. Thus, once again it was found that the
books of accounts maintained by the appellant-assessee were not in order.
In spite of issuance of notice and giving hearing to the appellant-
assessee firm, sufficient explanation was not provided to the Assessing
Officer and therefore, assessment for Assessment Year 1999-2000 was made
under Section 23(3) of the Act. As the Assessing Officer had come to a
conclusion that correct books of accounts had not been maintained, penalty
was also imposed upon the assessee by assessment order dated 31.12.2001 for
the said assessment year. Similarly, for the Assessment-Year 2000-2001
also, the books of accounts had not been maintained properly. In view of
the said fact the Assessing Officer had taken into account figures of sales
arrived at by him for the Assessment Year 1999-2000 and had added 10%
thereon as that was considered to be a normal growth of the business in
normal circumstances, thereby arriving at gross sales for the Assessment
Year 2000-2001.
Being aggrieved by the above mentioned assessment orders, the
assessee had preferred appeals before the Commissioner of Sales Tax, which
had been dismissed by an order dated 13.11.2003 and therefore, the assessee
had preferred appeals before the Appellate Tribunal of Sales Tax, which had
also been dismissed by a common order dated 03.11.2004.
Thereafter, the appellant-assessee had approached the High Court by
filing STC Nos.1 and 2 of 2008. The High Court was also pleased to dismiss
the said Reference Cases after giving hearing to the concerned parties by a
common judgment dated 19th May, 2009 as no question of law was involved in
the said cases. The said judgment has been challenged in the present
appeals.
4. The learned counsel appearing for the appellant-assessee had mainly
submitted that the assessment orders were passed under Section 23(3) of the
Act as the authorities were not satisfied with the details furnished by the
appellant-assessee. In the aforestated circumstances, it was obligatory on
the part of the assessing authority to issue notice and give hearing to the
assessee so that appropriate explanation could be given to the authorities
by the assessee. As no notice was given to the assessee before the
assessment, the impugned assessment orders as well as the orders passed in
appeal are bad in law. Thereafter, it had been submitted that merely on
the basis of two visits to the business place of the appellant-assessee,
the Assessing Officer could not have jumped to a conclusion that the sale
proceeds received on those two days were standard or normal and therefore,
on the basis of those sale proceeds, assessments could not have been made.
It had been further submitted that in the business of the assessee, being a
dealer in eatables, normally there would be huge variation in sale on
different days. On a particular day, sale proceeds could be more than rest
of the days and therefore, on the basis of some selected days, i.e., 9th
and 10th March, 2000 and 24th October, 2000, the Assessing Officer could
not have made the assessments.
5. It had been further submitted that the penalty imposed upon the
appellant-assessee was based on guess work or conjectures. There was no
basis for the Assessing Officer to believe that the books of accounts
maintained by the assessee were not correct and the facts found on those
selected days when there were surprise visits by the officers of the
Department were normal, i.e., the assessee was every day getting the same
amount by way of sale of eatables. Moreover, adjustments regarding the
amount of tax recovered had not been made while calculating the estimated
sales.
6. For the aforestated submissions, the learned counsel appearing for
the appellant-assessee had submitted that the judgment of the High Court,
confirming the assessment orders, should be quashed and set aside and even
the orders imposing penalty should be quashed.
7. On the other hand, the learned counsel appearing for the Revenue had
submitted that it was apparent that the appellant-assessee was not
correctly showing all transactions in his books of accounts. The said fact
could be very well seen when the representatives of the Department had
visited the place of business of the assessee on 9th and 10th March, 2000
and on 24th October, 2000. The sale proceeds, which had been meticulously
recorded on those two days in accounting year 1999-2000 were Rs.2,13,974/-
and Rs.1,98,009/- respectively whereas total sales for the said year was
much less. In the aforestated circumstances, average sale of the
aforestated two days was calculated and multiplying the same by 365 (days
of the year), the Department had arrived at a figure of estimated sales for
the year 1999-2000 and similarly after making a reasonable addition of 10%,
sale for the Assessment Year 2000-2001 had been arrived at.
8. In spite of the notice issued to the assessee for giving explanation
with regard to the discrepancy, the assessee could not give any
satisfactory explanation and therefore, the Assessing Officer was
constrained to presume that the books of accounts were not maintained
properly by the appellant- assessee.
9. As the Assessing Officer had come to the conclusion that the books of
accounts had not been properly maintained with an oblique motive, penalty
was rightly imposed upon the assessee and the quantum of penalty imposed
was also just and proper.
10. For the aforestated reasons, the learned counsel appearing for the
Revenue had submitted that the assessment orders, which had been affirmed
by all the authorities below and the High Court are just and proper and
they need not be interfered with.
11. We had heard the learned counsel for the parties and had also
considered the relevant orders as well as legal submissions made by the
counsel.
12. We do not find any substance in the submissions made on behalf of the
appellant-assessee and therefore, we are not inclined to allow the appeals
for the reasons stated hereinbelow :
(i) The appellant-assessee is making and selling sweets, namkeens
and other eatables. It appears from the record that when an
individual customer was buying eatables of a nominal value, possibly
bill was not being issued. There was no specific method whereby each
and every receipt from the buyers was recorded by the assessee. In
the aforestated circumstances, possibly due to some doubt, which might
have arisen, a special search or inspection was made on 9th and 10th
March, 2000 and total sale proceeds had been meticulously recorded and
calculated, which have been stated hereinabove. On the basis of the
receipts of those two days, considering them as a representative
sample, the Assessing Officer had come to a conclusion that the sale
proceeds or sales of the appellant-assessee for the year should have
been a particular amount and, in fact, the amount reflected in the
books of accounts was much less than the calculations arrived at by
the Assessing Officer.
(ii) It is pertinent to note that the Assessing Officer did not jump
to a conclusion without any rhyme or reason. The Assessing Officer
had called upon the assessee to explain the difference but the
assessee could not or did not give sufficient explanation as to how
the total sale on the basis of the average daily sale arrived at by
the Assessing Officer was not correct. One can very well presume that
in case of a dealer dealing in eatables, and specially sweets and
namkeens, on a particular day like a holiday or on account of some
festivity, total sale can be more than other days. For example, sale
would normally be more on Saturdays, Sundays and other holidays
because more people would be visiting such eateries. In the instant
case, had those two days, when business premises of the assessee was
inspected and the sale proceeds were recorded, been some special days,
the assessee could have placed those special facts before the
Assessing Officer, but nothing of that sort was done. In the
circumstances, in our opinion, the Assessing Officer had rightly come
to the conclusion that the books of accounts maintained by the
assessee were not showing correct sales and therefore, the conclusion
arrived at by him cannot be said to be incorrect. There was a
reasonable basis for him to arrive at the said conclusion, especially
when the assessee did not offer any satisfactory explanation in spite
of issuance of notice.
(iii) The submission made by the learned counsel appearing for the
appellant-assessee that no notice was issued, as required under the
Act, before framing the assessment is also not correct. The
assessment orders refer to notices issued to the assessee and they
also record the fact that no satisfactory explanation had been offered
by the appellant-assessee to make out a case that there was some
special reason for which sale of sweets, namkeen etc. on 9th and 10th
March, 2000 was exceptionally more.
(iv) Once the Assessing Officer had rightly come to the conclusion
that the books of accounts were not properly maintained and were not
reflecting each and every transaction, in our opinion, the Assessing
Officer had rightly come to a conclusion that total possible sale was
much higher and the conclusion so arrived at was based on sound
reasons. We also do not agree with the learned counsel for the
assessee that proper adjustments regarding sales tax had not been made
by the Assessing Officer in the process of the assessment.
(v) Once it is found that with some oblique motive, effort was made
to show lesser sale proceeds than the actual, the orders imposing
penalty can not be questioned. We are, therefore, not inclined to
interfere even with the quantum of penalty.
13. For the aforestated reasons, in our opinion, the impugned judgment
delivered by the High Court is just and proper, which does not require any
interference and therefore, the appeals are dismissed with no order as to
costs.
…………………………….,J.
(Anil R. Dave)
…………………………….,J.
(Dipak Misra)
New Delhi;
April 9, 2014
-----------------------
12
The appellant - assessee has been registered under the Delhi Sales
Tax Act, 1975 (hereinafter referred to as the ‘Act’) as well as under the
Delhi Value Added Tax, 2004 and is carrying on the business of manufacture
and sale of sweets, namkeens and other eatables. On 9th March, 2000 and
10th March, 2000, officers from the office of the Commissioner of Sales Tax
had visited business premises of the appellant-firm and had recorded
statements of partners of the appellant-firm and had also checked total
cash inflow on those days. =
We do not find any substance in the submissions made on behalf of the
appellant-assessee and therefore, we are not inclined to allow the appeals
for the reasons stated hereinbelow :
(i) The appellant-assessee is making and selling sweets, namkeens
and other eatables. It appears from the record that when an
individual customer was buying eatables of a nominal value, possibly
bill was not being issued. There was no specific method whereby each
and every receipt from the buyers was recorded by the assessee. In
the aforestated circumstances, possibly due to some doubt, which might
have arisen, a special search or inspection was made on 9th and 10th
March, 2000 and total sale proceeds had been meticulously recorded and
calculated, which have been stated hereinabove. On the basis of the
receipts of those two days, considering them as a representative
sample, the Assessing Officer had come to a conclusion that the sale
proceeds or sales of the appellant-assessee for the year should have
been a particular amount and, in fact, the amount reflected in the
books of accounts was much less than the calculations arrived at by
the Assessing Officer.
(ii) It is pertinent to note that the Assessing Officer did not jump
to a conclusion without any rhyme or reason. The Assessing Officer
had called upon the assessee to explain the difference but the
assessee could not or did not give sufficient explanation as to how
the total sale on the basis of the average daily sale arrived at by
the Assessing Officer was not correct. One can very well presume that
in case of a dealer dealing in eatables, and specially sweets and
namkeens, on a particular day like a holiday or on account of some
festivity, total sale can be more than other days. For example, sale
would normally be more on Saturdays, Sundays and other holidays
because more people would be visiting such eateries. In the instant
case, had those two days, when business premises of the assessee was
inspected and the sale proceeds were recorded, been some special days,
the assessee could have placed those special facts before the
Assessing Officer, but nothing of that sort was done. In the
circumstances, in our opinion, the Assessing Officer had rightly come
to the conclusion that the books of accounts maintained by the
assessee were not showing correct sales and therefore, the conclusion
arrived at by him cannot be said to be incorrect. There was a
reasonable basis for him to arrive at the said conclusion, especially
when the assessee did not offer any satisfactory explanation in spite
of issuance of notice.
(iii) The submission made by the learned counsel appearing for the
appellant-assessee that no notice was issued, as required under the
Act, before framing the assessment is also not correct. The
assessment orders refer to notices issued to the assessee and they
also record the fact that no satisfactory explanation had been offered
by the appellant-assessee to make out a case that there was some
special reason for which sale of sweets, namkeen etc. on 9th and 10th
March, 2000 was exceptionally more.
(iv) Once the Assessing Officer had rightly come to the conclusion
that the books of accounts were not properly maintained and were not
reflecting each and every transaction, in our opinion, the Assessing
Officer had rightly come to a conclusion that total possible sale was
much higher and the conclusion so arrived at was based on sound
reasons. We also do not agree with the learned counsel for the
assessee that proper adjustments regarding sales tax had not been made
by the Assessing Officer in the process of the assessment.
(v) Once it is found that with some oblique motive, effort was made
to show lesser sale proceeds than the actual, the orders imposing
penalty can not be questioned. We are, therefore, not inclined to
interfere even with the quantum of penalty.
13. For the aforestated reasons, in our opinion, the impugned judgment
delivered by the High Court is just and proper, which does not require any
interference and therefore, the appeals are dismissed with no order as to
costs.
2014 (April.Part) judis.nic.in/supremecourt/filename=41401 ANIL R. DAVE, DIPAK MISRA
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs. 4465-4468 OF 2014
(Arising out of SLP (C) Nos.22912-22915 of 2009)
M/s Nathu Ram Ramesh Kumar … Appellant
Versus
Commr. of Delhi Value Added Tax … Respondent
J U D G M E N T
Anil R. Dave, J.
1. Leave granted.
2. Being aggrieved by the judgment delivered by the High Court of Delhi
in STC Nos.1 and 2 of 2008 and CM Nos.2161 and 2162 of 2008, these appeals
have been filed by the appellant assessee. The assessee has been aggrieved
by the assessment orders as well as the orders of penalty. As both the
appeals pertain to the assessee-appellant, at the request of the learned
counsel, they were heard together.
3. The facts giving rise to the present litigation, in a nutshell, are
as under :
The appellant - assessee has been registered under the Delhi Sales
Tax Act, 1975 (hereinafter referred to as the ‘Act’) as well as under the
Delhi Value Added Tax, 2004 and is carrying on the business of manufacture
and sale of sweets, namkeens and other eatables. On 9th March, 2000 and
10th March, 2000, officers from the office of the Commissioner of Sales Tax
had visited business premises of the appellant-firm and had recorded
statements of partners of the appellant-firm and had also checked total
cash inflow on those days. On those two days, sale proceeds were
Rs.2,13,974/- (Rupees two lac thirteen thousand nine hundred and seventy
four only) and Rs.1,98,009/- (Rupees one lac ninety eight thousand and nine
only) respectively.
At the time of assessment for the Assessment Year 1999-2000, it was
found by the Assessing Officer that the assessee had not shown its income
correctly and therefore, the Assessing Officer had taken into account the
facts gathered on the aforesaid two days for the purpose of assessing total
sales. On the basis of the gross receipts of sale effected on the
aforestated two days, average receipts per day had been calculated and the
Assessing Officer had come to a conclusion that the sale proceeds of the
assessee for the relevant year was Rs.7,51,86,350/- (Rupees seven crore
fifty one lacs eighty six thousand three hundred and fifty only). Before
coming to the said conclusion, the assessee was given an opportunity to
explain its books of accounts, as there was substantial discrepancy between
the receipts shown in the books of accounts and the gross receipts which
were actually found on the aforestated two days. It was, prima facie,
believed by the Assessing Officer that the assessee had not given accurate
details about the gross receipts.
Similarly for the Assessment Year 2000-2001, on 24.10.2000 also there
was a surprise visit to the place of business of the appellant-assessee and
even on that day it was found by the officers that there was discrepancy in
cash on hand and cash as per books of accounts. Moreover, they also found
that there was discrepancy in stock as the actual stock and stock as per
books of accounts were not same. Thus, once again it was found that the
books of accounts maintained by the appellant-assessee were not in order.
In spite of issuance of notice and giving hearing to the appellant-
assessee firm, sufficient explanation was not provided to the Assessing
Officer and therefore, assessment for Assessment Year 1999-2000 was made
under Section 23(3) of the Act. As the Assessing Officer had come to a
conclusion that correct books of accounts had not been maintained, penalty
was also imposed upon the assessee by assessment order dated 31.12.2001 for
the said assessment year. Similarly, for the Assessment-Year 2000-2001
also, the books of accounts had not been maintained properly. In view of
the said fact the Assessing Officer had taken into account figures of sales
arrived at by him for the Assessment Year 1999-2000 and had added 10%
thereon as that was considered to be a normal growth of the business in
normal circumstances, thereby arriving at gross sales for the Assessment
Year 2000-2001.
Being aggrieved by the above mentioned assessment orders, the
assessee had preferred appeals before the Commissioner of Sales Tax, which
had been dismissed by an order dated 13.11.2003 and therefore, the assessee
had preferred appeals before the Appellate Tribunal of Sales Tax, which had
also been dismissed by a common order dated 03.11.2004.
Thereafter, the appellant-assessee had approached the High Court by
filing STC Nos.1 and 2 of 2008. The High Court was also pleased to dismiss
the said Reference Cases after giving hearing to the concerned parties by a
common judgment dated 19th May, 2009 as no question of law was involved in
the said cases. The said judgment has been challenged in the present
appeals.
4. The learned counsel appearing for the appellant-assessee had mainly
submitted that the assessment orders were passed under Section 23(3) of the
Act as the authorities were not satisfied with the details furnished by the
appellant-assessee. In the aforestated circumstances, it was obligatory on
the part of the assessing authority to issue notice and give hearing to the
assessee so that appropriate explanation could be given to the authorities
by the assessee. As no notice was given to the assessee before the
assessment, the impugned assessment orders as well as the orders passed in
appeal are bad in law. Thereafter, it had been submitted that merely on
the basis of two visits to the business place of the appellant-assessee,
the Assessing Officer could not have jumped to a conclusion that the sale
proceeds received on those two days were standard or normal and therefore,
on the basis of those sale proceeds, assessments could not have been made.
It had been further submitted that in the business of the assessee, being a
dealer in eatables, normally there would be huge variation in sale on
different days. On a particular day, sale proceeds could be more than rest
of the days and therefore, on the basis of some selected days, i.e., 9th
and 10th March, 2000 and 24th October, 2000, the Assessing Officer could
not have made the assessments.
5. It had been further submitted that the penalty imposed upon the
appellant-assessee was based on guess work or conjectures. There was no
basis for the Assessing Officer to believe that the books of accounts
maintained by the assessee were not correct and the facts found on those
selected days when there were surprise visits by the officers of the
Department were normal, i.e., the assessee was every day getting the same
amount by way of sale of eatables. Moreover, adjustments regarding the
amount of tax recovered had not been made while calculating the estimated
sales.
6. For the aforestated submissions, the learned counsel appearing for
the appellant-assessee had submitted that the judgment of the High Court,
confirming the assessment orders, should be quashed and set aside and even
the orders imposing penalty should be quashed.
7. On the other hand, the learned counsel appearing for the Revenue had
submitted that it was apparent that the appellant-assessee was not
correctly showing all transactions in his books of accounts. The said fact
could be very well seen when the representatives of the Department had
visited the place of business of the assessee on 9th and 10th March, 2000
and on 24th October, 2000. The sale proceeds, which had been meticulously
recorded on those two days in accounting year 1999-2000 were Rs.2,13,974/-
and Rs.1,98,009/- respectively whereas total sales for the said year was
much less. In the aforestated circumstances, average sale of the
aforestated two days was calculated and multiplying the same by 365 (days
of the year), the Department had arrived at a figure of estimated sales for
the year 1999-2000 and similarly after making a reasonable addition of 10%,
sale for the Assessment Year 2000-2001 had been arrived at.
8. In spite of the notice issued to the assessee for giving explanation
with regard to the discrepancy, the assessee could not give any
satisfactory explanation and therefore, the Assessing Officer was
constrained to presume that the books of accounts were not maintained
properly by the appellant- assessee.
9. As the Assessing Officer had come to the conclusion that the books of
accounts had not been properly maintained with an oblique motive, penalty
was rightly imposed upon the assessee and the quantum of penalty imposed
was also just and proper.
10. For the aforestated reasons, the learned counsel appearing for the
Revenue had submitted that the assessment orders, which had been affirmed
by all the authorities below and the High Court are just and proper and
they need not be interfered with.
11. We had heard the learned counsel for the parties and had also
considered the relevant orders as well as legal submissions made by the
counsel.
12. We do not find any substance in the submissions made on behalf of the
appellant-assessee and therefore, we are not inclined to allow the appeals
for the reasons stated hereinbelow :
(i) The appellant-assessee is making and selling sweets, namkeens
and other eatables. It appears from the record that when an
individual customer was buying eatables of a nominal value, possibly
bill was not being issued. There was no specific method whereby each
and every receipt from the buyers was recorded by the assessee. In
the aforestated circumstances, possibly due to some doubt, which might
have arisen, a special search or inspection was made on 9th and 10th
March, 2000 and total sale proceeds had been meticulously recorded and
calculated, which have been stated hereinabove. On the basis of the
receipts of those two days, considering them as a representative
sample, the Assessing Officer had come to a conclusion that the sale
proceeds or sales of the appellant-assessee for the year should have
been a particular amount and, in fact, the amount reflected in the
books of accounts was much less than the calculations arrived at by
the Assessing Officer.
(ii) It is pertinent to note that the Assessing Officer did not jump
to a conclusion without any rhyme or reason. The Assessing Officer
had called upon the assessee to explain the difference but the
assessee could not or did not give sufficient explanation as to how
the total sale on the basis of the average daily sale arrived at by
the Assessing Officer was not correct. One can very well presume that
in case of a dealer dealing in eatables, and specially sweets and
namkeens, on a particular day like a holiday or on account of some
festivity, total sale can be more than other days. For example, sale
would normally be more on Saturdays, Sundays and other holidays
because more people would be visiting such eateries. In the instant
case, had those two days, when business premises of the assessee was
inspected and the sale proceeds were recorded, been some special days,
the assessee could have placed those special facts before the
Assessing Officer, but nothing of that sort was done. In the
circumstances, in our opinion, the Assessing Officer had rightly come
to the conclusion that the books of accounts maintained by the
assessee were not showing correct sales and therefore, the conclusion
arrived at by him cannot be said to be incorrect. There was a
reasonable basis for him to arrive at the said conclusion, especially
when the assessee did not offer any satisfactory explanation in spite
of issuance of notice.
(iii) The submission made by the learned counsel appearing for the
appellant-assessee that no notice was issued, as required under the
Act, before framing the assessment is also not correct. The
assessment orders refer to notices issued to the assessee and they
also record the fact that no satisfactory explanation had been offered
by the appellant-assessee to make out a case that there was some
special reason for which sale of sweets, namkeen etc. on 9th and 10th
March, 2000 was exceptionally more.
(iv) Once the Assessing Officer had rightly come to the conclusion
that the books of accounts were not properly maintained and were not
reflecting each and every transaction, in our opinion, the Assessing
Officer had rightly come to a conclusion that total possible sale was
much higher and the conclusion so arrived at was based on sound
reasons. We also do not agree with the learned counsel for the
assessee that proper adjustments regarding sales tax had not been made
by the Assessing Officer in the process of the assessment.
(v) Once it is found that with some oblique motive, effort was made
to show lesser sale proceeds than the actual, the orders imposing
penalty can not be questioned. We are, therefore, not inclined to
interfere even with the quantum of penalty.
13. For the aforestated reasons, in our opinion, the impugned judgment
delivered by the High Court is just and proper, which does not require any
interference and therefore, the appeals are dismissed with no order as to
costs.
…………………………….,J.
(Anil R. Dave)
…………………………….,J.
(Dipak Misra)
New Delhi;
April 9, 2014
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