- (1.) THE Sales Tax Tribunal, Haryana, has in pursuance of an order of this court made on 2nd December, 1970, under Section 22 (3) of the Punjab General Sales Tax Act, 1948 (referred to hereinafter as the Act), referred the following two questions of law for being settled: (1) Whether on the facts and circumstances of this case, an increase of Rs. 51,523. 88 in the taxable turnover of the petitioner-firm is justified ? (2) Whether on the facts and circumstances of this case, the imposition of the penalty of Rs. 2,000 on the petitioner-firm is justified?
(2.) M/s. Tara Chand Hari Ram is a firm registered as a dealer under the Act. It carries on business at Rewari in the district of Gurgaon. The dealer filed quarterly returns for all the four quarters for the year 1964-65 in which the gross turnover was shown at Rs. 2,73,476. 12. After claiming deductions permissible under the law, the taxable turnover was worked out at Rs. 2,60,371. 10 on which a tax of Rs. 11,286. 71 was deposited. The assessing authority was not satisfied with the return and inspected the premises of the assessee. It found many irregularities on inspection of the records. A number of loose parchas relating to certain transactions were taken into possession by the Excise and Taxation Officer. Accounts were scrutinised and the account books did not appear to be regularly maintained. There was also a dasti note-book containing account of empty bardana which was returned to the dealer. The assessing authority was not satisfied with the explanation furnished by the dealer and the irregularities so discovered may be stated hereunder: (1) That three parchas were recovered from the shop of the appellant marked as Nos. 20, 21 and 27. Parcha No. 20 related to Rs. 350 in relation to one Shri Nihal Chand while parcha No. 21 related to some figures and parcha No. 27 related to Rs. 6,000 and Rs. 1,000 and the transactions of these parchas could not be explained by the appellant. (2) That in the note-book recovered from the shop of the dealer, the dealer admitted that the note-book related to bardana and certain transactions of sales. He has mentioned 4 such sales which were conducted on 6-8-1964, 17-9-1964 and 16-10-1964 but entries in the register were made on 21-9-1964, 1-3-1965 and 7-3-1965, respectively. (3) That the dealer had effected 11 sales on 5-5-1964, 4-8-1964, 25-8-1964, 2-9-1964, 3-9-1964, 3-9-1964, 4-9-1964, 5-9-1964, 12-9-1964, 14-9-1964 and 17-9-1964, but they were not incorporated in his account books.
(3.) KEEPING in view the extent of business and position, the assessing authority made a best judgment assessment determining the gross turnover at Rs. 4,25,000 as against Rs. 3,73,476. 12 as returned by the assessee. Allowing the necessary deductions, the total tax assessed came to Rs. 14,070. 36 against the voluntary payment of Rs. 11,286. 71. A penalty of Rs. 3,928. 37 which was hundred per cent, of the tax involved under Section 11 (7) of the Act was imposed. New demand in a sum of Rs. 7,856. 74 was thus created.;