M/S Agarwal Iron vs Commissioner Commercial Tax Lko.

Ashwani Kumar Mishra, J.—This revision is filed under Section 58(1) of the U.P. Value Added Tax Act. It is contended that the authorities as well as the Tribunal have wrongly discarded the books of accounts furnished by assessee, without recording any defect in the books of accounts, which may justify resort to best judgment. Learned counsel points out with reference to the order of the Tribunal that the survey report itself had been doubted by the Tribunal. Contention is that without specifying as to which of the transaction is not substantiated, the Tribunal has determined the tax payable.

Learned Standing Counsel appearing for the Tribunal has not been able to demonstrate as to for what reason the books of account of the assessee have been discarded. It is also not disputed that there is no definite basis to justify the enhancement of tax amount upon the assessee.

From the materials placed on record, this Court finds that the Tribunal has not adverted itself to the issue as to whether in the absence of any materials or findings to discard the books of account, it could resort to best judgment procedure,for determining the liability of tax. The court finds that the Tribunal while enhancing the amount of tax payable has proceeded merely on presumption / surmises, rather than any definite material available on record.

In the facts and circumstances, noticed above, the question of law is answered by holding that it was not permissible for the Tribunal to have discarded the books of account, without pointing out any defects in the books of account, and the levy of tax cannot be justified on vague and unsubstantiated basis. Tribunal may proceed to reconsider the question, in accordance with law.

Revision is accordingly disposed of.