MADUPALLI ANJANEYULU Vs. STATE OF ANDHRA
HIGH COURT OF ANDHRA PRADESH
STATE OF ANDHRA PRADESH, REPRESENTED BY THE COMMERCIAL TAX OFFICER, WEST GODAVARI AT ELURU.
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(1.)This is a revision filed by the assessees against the decision of the
Sales Tax Appellate Tribunal in T.A. No. 225-A of 1953.
The petitioners are a firm of dealers in Kirana articles at Eluru. They have
two departments of trade, one wholesale and the other partly wholesale and partly
retail. For the year of assessment 1952-53, they submitted a total turnover of
Rs. 6,35,122 made up of Rs. 1,44,442 from the wholesale department and Rs. 4,90,680
from the partly wholesale and partly retail department. The petitioners' shop was
inspected by the Special Assistant Commercial Tax Officer and he found that all
the sales were not brought into account. He discovered three sales written on
slips of paper in the year 1952-53 which did not find a place in the accounts. For
the year 1953-54, he found that such sales written on slips of paper, but which were
not brought into account, were more than 70 in number. A notice was issued
that the net turnover would be determined to the best of judgment. The petitioners
sent their reply to the notice. After the reply was received, it was considered and
the Deputy Commercial Tax Officer in his order of assessment, determined the net
turnover finally for 1952-53 as follows :
(2.)The petitioners were finally assessed on this turnover to a sales-tax of Rs. 10,583-6-3.
The assessees preferred an appeal to the Commercial Tax Officer. The Commercial Tax
Officer held that the Deputy Commercial Tax Officer was not justified in utilising the
material relating to 1953-54 for enhancing the turnover of 1952-53. He characterised this
as both unjust and unwarranted and allowed the appeal in part. While the Deputy Commercial Tax Officer estimated the margin of profit for the business of the petitioners at 12 per cent., the Commercial Tax Officer added the difference of 6.5 per cent (the difference between the actual profit shown as per the accounts and the estimated profit of 12 per cent). The Commercial Tax
Officer restricted the addition of 6.5 percent to the turnover of retail sales and fixed
the addition of Rs. 31,893 as against Rs. 41,340 adopted by the Deputy Commercial Tax Officer.
By a majority judgment, the Sales Tax Appellate Tribunal held that the addition of 5 per cent,
profit would meet the ends of justice and accordingly fixed an
addition of Rs. 24,534-0-2 in the place of Rs. 31,893 estimated by the Commercial
Tax Officer. The chairman of the Sales Tax Appellate Tribunal, in a dissenting
judgment, held that there was no data made available justifying the addition of
either 6.5 per cent, by the Commercial Tax Officer or the addition of 5 per cent,
instead by his colleagues.
(3.)Rule 8 of the Sales Tax Turnover and Assessment Rules reads as follows :
"If no return is submitted by the dealer as required by Rule 6 or if the return submitted by him
appears to the assessing authority to be incorrect or incomplete, the assessing authority shall, after
making such enquiry as he considers necessary, determine the turnover of the dealer to the best of his
judgment, and fix provisionally the annual tax or taxes payable at the rate or rates specified in section
3 or 5 or notified under section 6 (1)."
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