M/S Abhinav Steels Pvt. Ltd. vs Commissioner, Commercial Tax Lko.

Ashwani Kumar Mishra, J.—The books of account of the assessee have been discarded by the authorities under the Act essentially on the ground that there was excess consumption of electricity in auxiliary works Otherwise, there exists a categorical finding that statement shown in the books of account tallies with the record available and placed before the authorities, and there is no inconsistency.

Learned counsel for the assessee contends that the view taken by the tribunal is inconsistent, and in teeth of the law laid down in M/S Shyam Rice Mills v. Commissioner of Sales Tax, U.P. reported in 1988 U.P.T.C. 375. Paragraph 13 of the judgement, which is relied upon, is reproduced:-

"Coming to the third ground, namely the disparity in consumption of electricity, my attention was invited to two decisions of this Court in Mahavir Prasad Jagdish Prasad v. Commissioner of Sales Tax, 1981 UPTC 337 and Mahashakti Oil Mills v. Commissioner of Sales Tax, 1972 UPTC 361. The view taken in these decisions is that an excess consumption of electricity may give rise to a suspicion and may call for a deeper scrutiny of the accounts but in the absence of any other material the account books cannot be rejected on suspicion alone. In the instant case, except for the finding that the consumption of electricity was more as compared to the production of rice in the year, no discrepancy was found in production account or in other account books of the assessee. This was also not a good ground for rejecting the assessee''s account books."

With reference to the aforesaid exposition of law, learned counsel submits that Tribunal was wholly unjustified in discarding the books of account only on account of the fact that the consumption of electricity was found to be on a higher side.

Learned Standing Counsel although has attempted to support the view taken by the tribunal, but fairly states that the only basis to discard the books of account is the alleged excess consumption of electricity viz-a-viz, the figures in the previous years. It is not disputed that otherwise the books of account have been found to be in order.

Having noticed the aforesaid submission, this Court finds that the sole ground taken to discard the books of account, in the facts and circumstances, is the alleged excess consumption of electricity. The view so taken by the Tribunal is in apparent conflict that the ratio of law laid down by this Court in M/S Shyam Rice Mills (Supra). This Court had relied upon two previous judgement, which have been referred to in the decision to hold that mere excess consumption of electricity, can at best given rise to suspicion so as to warrant examination of other materials, but that by itself would not be sufficient to discard the books of account.

I am in the respectful agreement with the view so taken. There is nothing on record to show that accounts furnished were otherwise not reliable. In such view of the matter, the tribunal was not justified in discarding the books of account for the reasons recorded in the order. The question of law is answered accordingly.