GULATI, J. - (1.) THIS is a reference under section 11(1) of the U.P. Sales Tax Act which has been submitted by the Additional Judge (Revisions) Sales Tax, Agra, inviting the opinion of this court on the following three questions of law :- "(1) Whether in the circumstances of this case as found in revision the accounts of the dealer for the year 1964-65 could be legally rejected ? (2) Whether on the facts and circumstances of the case as pointed out in revision the alleged transfer of stock amounting to Rs. 2,85,773 to Jullundur branch of the dealer could be legally regarded as inter-State sale ? (3) Whether the material found on record supports the fixation of the turnover in the case of U.P. sales at Rs. 12,60,000."
(2.) IN respect of the assessment year 1964-65 which is the assessment year in dispute, the assessee disclosed a turnover of Rs. 11,10,017 in its returns filed under the U.P. Sales Tax Act. Likewise it disclosed a turnover of Rs. 26,10,990 of inter-State sales in its returns filed under the Central Sales Tax Act. The books of accounts produced by the assessee in support of its returns were rejected and the Sales Tax Officer estimated the U.P. sales at Rs. 15,00,000. On appeal the Assistant Commissioner (Judicial) confirmed the finding of the Sales Tax Officer with regard to the rejection of accounts and also confirmed the estimate of the turnover. As regards the inter-State sales the Sales Tax Officer estimated the turnover at Rs. 30,00,000. The appellate authority upheld the estimate of the turnover at Rs. 30,00,000, but remanded the case to the Sales Tax Officer, because in his opinion the Sales Tax Officer had rejected the assessee's claim relating to the deductions worth Rs. 2,24,843 on insufficient grounds. The assessee then filed two separate revision applications, one against the order relating to the assessment under the U.P. Sales Tax Act and the other against the order relating to the Central sales tax. The Judge (Revisions) upheld the rejection of the assessee's account books. With regard to the estimate of sales he allowed some relief by reducing the estimate of the turnover of the U.P. sales tax. As regards the assessment under the Central Sales Tax Act, he set aside the order of remand passed by the appellate authority as in his opinion the claim of the assessee could be accepted on the material already on the record. He, however, maintained the enhancement made in the turnover of the inter-State sales at Rs. 30,00,000. The assessee then applied for a reference under section 11(1) of the U.P. Sales Tax Act. The Judge (Revisions) has granted that application and has submitted the present statement of the case. Coming to the questions which have been referred to us, we find that question No. (1) has not been properly framed. Whether in a particular case the account books should be accepted or rejected is essentially a question of fact and does not give rise to any question of law. The only question that can arise in such a case is whether there was any material for rejecting the assessee's accounts. We accordingly reframe the question to read : "Whether the rejection of the assessee's books of accounts is supported by any material on the record ?"
(3.) IT appears that the Sales Tax Officer had rejected the accounts on several grounds some of which did not find favour with the Judge (Revisions). He, however, found the assessee's books of accounts liable to rejection on the following grounds : (i) That the assessee had not maintained a proper manufacturing account. The stock register maintained by the assessee did not show the issue of raw material and receipt of finished goods itemwise and from day to day with the result that no proper checking and verification was possible. (ii) That for the past three years the assessee's sales as disclosed by it were much lower than its total purchases which, according to him, was an abnormal circumstance for which there was no satisfactory explanation. (iii) That the assessee's claim that it had sold goods worth Rs. 2,85,773 to its Jullundur branch had not been proved. He found that there was no entry in the books of accounts with regard to the transfer of stocks to the Jullundur branch. ;