Shiveshwar Prasad Sinha, J. - (1.)This court called for the statement of the case under Section 33(3) of the Bihar Sales Tax Act, 1959, on the questions which are pari materia in respect of both the applications. The references have been heard together and, therefore, they are decided by a consolidated judgment. The questions on which statement of the case was called, for different periods, are as under: For the period 1961-62.-Whether the addition of Rs. 5,76,887.41 to the gross turnover on account of possible omission for the year 1961-62 is legal and valid in the facts and circumstances of the case ? For the period 1st April, 1963, to 30th September, 1963.-Whether the addition of a sum of Rs. 2,85,471.37 to the gross turnover for the period from 1st April, 1963, to 30th September, 1963, on account of possible omission is legal and valid in the facts and circumstances of the case ?
(2.)The facts relevant are that the petitioner is a registered dealer carrying on business at Patna in the name and style of Messrs. Standard Mercantile Company. The business consists of sale of iron and pig iron, hardware pipes, sand and china clay and G.I. sheets. While the assessments for the years 1961-62 and 1962-63 were still pending, on the 16th September, 1963, the Superintendent of Commercial Taxes, Intelligence Branch, made a surprise inspection of the petitioner's business premises and seized in all twelve books of account. It is not necessary to mention all the books of account, which had been seized, except items Nos. 6 to 11 of the seizure list, which were the accounts maintained in respect of some clandestine business and which accounts were not intended to be produced for the purpose of assessment before the sales tax authorities. These six items were :
(1) One cash book from 17th September, 1962, to 7th May, 1963. (2) One cash book from 8th May, 1963, to 5th July, 1963. (3) One cash book from 5th April, 1963, to 15th September, 1963. (4) One cash book from 1st July, 1963, to 16th September, 1963. (5) One ledger for 1962-63. (6) One cash book from 12th December, 1961, to 4th April, 1962.
I may mention that the period 1961-62 for which assessment had been made corresponds to 1st April, 1961, to 31st March, 1962, and for the other assessment the period has already been mentioned, namely, 1st April, 1963, to 30th September, 1963. Looking at the aforesaid seized accounts it will be seen that item No. 6 is relevant for the period 1961-62 and item No. 1 in part and items Nos. 2, 3 and 4 in full relate to the next assessment period. Be that as it may, returns as originally filed by the petitioner for the respective periods were Rs. 48,66,268.57 as gross turnover for the period 1961-62 and Rs. 15,43,934.63 as gross turnover for the period 1st April, 1963, to 30th September, 1963. The sales tax authorities found that the transactions contained in the above seized accounts were also part of the dealer's transactions and that, therefore, tile dealer's turnover had to be estimated. In respect of the assessment period 1961-62 the sales tax authorities made the following three additions to determine the petitioner's gross turnover : JUDGEMENT_675_STC29_1972Html1.htm The petitioner having failed in its appeal before the sales tax authorities and also in revision before the Commercial Taxes Tribunal sought a reference on the question as to whether the addition of the aforesaid two amounts, namely, Rs. 5,76,887.41 and Rs. 2,85,471, for possible omission for transactions was valid in law. The claim for reference under Section 33(1) of the Sales Tax Act, 1959, having been rejected, this court called for a statement of the case on the question stated above.
(3.)Mr. Ramanugrah Prasad appearing for the petitioner submitted that although he had no grievance with regard to the additions made on the basis of the seized books of account, yet so far as the addition made for possible omission was concerned, that was based on no material and consequently, those additions could not be sustained. Referring to some of the case laws, which I will presently deal with, he submitted that even for the purpose of making a best judgment assessment the determination of the income must be based on some material and not on mere guesswork without having any means between the material and the turnover determined. Referring to the facts of the instant case, he submitted that the sales tax authorities had already made additions on the basis of the seized accounts and that, therefore, further addition by way of possible omission had no material whatsoever for its support. According to Mr. Prasad, therefore, the two amounts for the two respective periods as possible omissions were not sustainable in law;