MOTOR HOUSE Vs. STATE OF ORISSA

JUDGEMENT

(1.) ON the following question, the statement was called for in respect of the years 1974-75 and 1975-76 for which the dealer has been assessed.

(2.) THE dealer carries on the business of supply of moor parts, lubricants, batteries, nuts and bolts. For that purpose, he has been registered under the Orissa Sales Tax Act, 1947. Having submitted return under section 11 beyond the due date, assessment was completed under section 12(4) of the Act to the best of judgment of the Sales Tax Officer. In the return, dealer disclosed his turnover to be purchase price with 10 per cent profit. The Sales Tax Officer, however, enhanced the turnover in respect of hardware at 25 per cent and in respect of motor parts and lubricants at 30 per cent. On that basis, the Sales Tax Officer estimated the turnover demanding tax at the rates as applicable to those commodities. Dealer preferred an appeal. Assistant Commissioner found that addition of 25 per cent profit in respect of hardware and 30 per cent in respect of lubricants and motor parts is excessive. He reduced it to 15 per cent in respect of hardware and 20 per cent in respect of lubricants and motor parts. Thus 5 per cent more than what was estimated by the dealer was added to the purchase price in respect of hardware goods and 10 per cent more than dealer's estimate was added to the purchase price of lubricants and motor parts. Dealer preferred second appeal before the Tribunal. Tribunal was satisfied that enhancement as made by the Assistant Commissioner is justified. Dealer presented an application for stating a case to this Court under section 24(1) of the Act which was refused. Dealer filed an application under section 24(2)(b) of the Act in this Court on the basis of which statement of case was called for on the question of law extracted above.

(3.) ONCE on account of non-filing of return on due date, a dealer attracts liability for assessment to the best of judgment under section 12(4) of the Act, there is no scope for him to complain that the assessment should be completed on basis of accounts. Legislature having given a mandate to taxing authorities to complete assessment to the best of judgment there was no scope for them to complete assessment on the basis of accounts of a dealer. He is either to accept the return figure as correct and complete the assessment under section 12(1) or is to complete the assessment to the best of his judgment. For that purpose, he is required under the statute to call for the accounts of the dealer to get assistance from the same for a reasonable estimate. Estimate involves always guess work. Accordingly, a dealer having attracted statutory liability of best judgment assessment cannot complain of guess work even if no fault is found with his accounts. Correctness of accounts is not a sine qua non for accepting the return figure, and volume of business, conduct of the dealer, past records and other similar factors are to be taken into consideration to have an estimate. It should not be arbitrary. In the present case, Assistant Commissioner taking into consideration these matters for which there were materials before him, came to the conclusion that to the purchase figure and estimate of profit by the dealer a small percentage is to be added. When dealer himself made an estimate by adding profit of 10 per cent to furnish the return, he cannot complain that there should no be any further estimate. What would be the quantum of enhancement is a matter of inference from facts. No question of law arises where the enhancement is not arbitrary and is reasonable. We are satisfied that in the present case, on the circumstances enhancement is reasonable.