J.Gupta, Judicial Member. -
(1.) THE applicant No. 1 is a partnership -firm dealing in watch, clock, etc., and is a registered dealer as such. The applicant No, 2 is a partner of the applicant No. 1. The case of the partners (hereinafter collectively referred to as "the firm"), is as follows :
On August 28, 1980 an Inspector of Commercial Taxes, Bureau of Investigation conducted a search at the office of the firm at P -36, Radha Bazar Street, Calcutta, and seized all available books of accounts and documents. Subsequently, the Commercial Tax Officer (respondent No. 2) assessed the firm for the period of four quarters ending AB 2036 and by his order dated September 28, 1982 assessed the gross turnover to be Rs. 1,05,00,000 against the gross turnover of Rs. 60,56,765.18 as shown in the books of accounts. The appeal having been filed against the said assessment the appellate authority after several adjournments passed an ex parts order on September 29, 1992 rejecting the applicants' prayer for further adjournment on the ground that as many as 38 adjournments had already been allowed. He left the assessment uninterfered except for reducing the penalty from Rs. 10,000 to Rs. 1,000. The West Bengal Commercial Taxes Appellate and Revisional Board (hereinafter referred to as "the Board") in disposing of the revision application against the appellate order allowed partly the revision application by giving liberty to the appellate authority to allow deductions of Rs. 63,606 from the gross turnover on account of the credit notes claimed to have been received by the firm from Indo -French Time Industries Ltd. Being aggrieved the firm has filed the instant application under Section 8 of the West Bengal Taxation Tribunal Act, 1987 for setting aside the impugned assessment, the appellate order and the revisional order dated September 28, 1982, September 29, 1992 and September 23, 1998 respectively.
(2.) IN resisting the firm's prayer the respondents contend, in their affidavit -in -opposition, that during the assessments the firm has failed to explain the discrepancies manifest in the entries of the original return, revised return and books of accounts inspite of adequate opportunities having been given and that materials collected from the documents seized remained unexplained. According to the respondents, the assessing officer was, therefore, justified in rejecting the books of accounts and in making his "best judgment assessment". Their further case is that the firm was given adequate opportunity to produce documents to explain the discrepancies but it failed to do so. The issues before us are whether the respondent No. 2 is justified in rejecting the books of accounts of the firm and if so whether he is justified in raising the gross turnover to Rs. 1,05,00,000 and if in the appellate stage the firm got adequate opportunity to produce documents in support of his case and whether the impugned orders are liable to be set aside.
(3.) MR . M.L. Bhattacharyya, learned advocate for the applicants, assails the assessment firstly on the ground that there is no reason whatsoever to reject the books of accounts of the firm. But the assessment order (annexure B to the application) tells a different story. Firstly, the applicant on the first date of hearing on assessment filed a revised return for the third and fourth quarter of the year AB 2036. The respondent No. 2 detected that the gross turnovers shown in these revised returns were not only higher than the corresponding figures given in the original returns, the books of accounts lent no support to such enhanced figures. According to Mr. Bhattacharyya, detection of some inadvertent lapses in making entries in respect of certain transactions necessitated filing of revised return. He adds that such filing of revised return shows bona fides of the applicants. But this could have been treated as a bona fide act, had not there been in the meantime a seizure of some covertly maintained business documents. Mr. J.K, Goswami contends that after seizure of the documents the applicant -firm became apprehensive of exposure of their suppressed business transactions and that filing of such revised return is a ploy to pass the suppressed transaction for bona fide mistakes. We too are unable to accept the filing of the revised return, only after the seizure of some undisclosed documents, as a bona fide attempt to rectify some inadvertent errors. Section 10(4) of the Bengal Finance (Sales Tax) Act, 1941 (in short, "the 1941 Act") provides that if any dealer discovers any omission or other error in any return, he may file a revised return before the prescribed date for furnishing the next return, i.e., in case of quarterly return before expiry of three months of the due date of filing of the defective return. In the instant case the assessment relates to 1980 but the revised returns were filed on September 13, 1984. The assessment order further shows that even at the assessment hearing, the firm failed to justify the foundation of the revised return by filing any supporting bill or other corroborating evidence. This aspect has not been disputed before us.;