The Public Prosecutor vs K.P. Chandrasekharan (No. 2)

Somasundaram, J.—This is an appeal against the acquittal of the respondent by the Additional First Class Magistrate in a Sales Tax Act

case. The respondent in this case is the same as the respondent in Crl. R. C. No. 711 of 1955.1 This case relates to the assessment for three

months in the year 1952-53. The respondent has not submitted any return declaring his turnover because according to him he had stopped the

business as it ended in a loss. But in a statement by the respondent before the Deputy Commercial Tax Officer he had stated that he started the

business on 4th November, 1951, and carried on the trade for about 8 months, that thereafter due to heavy loss that business was stopped and

that he had not done any business afterwards. He says that the shop was released on 2nd July, 1952. Very rightly therefore the authorities came to

the conclusion that 8 months from 4th November, 1951, would take him to July, 1952, and that on his own statement the respondent released the

shop on 2nd July, 1952, and that therefore he must have carried on the business till that date. He has also stated that the accounts for the year

1952 are in the Small Cause Court, Kozhikode, and that he will produce them very soon. This statement was made on 16th March, 1954. The

Deputy Commercial Tax Officer by notice dated 20th March, 1954, Exhibit P-2, called upon him to pay the tax by assessing the assessee to the

best of his judgment. For the quarter he assessed him on the turnover of Rs. 50,000 on the basis of the turnover of Rs. 2,00,000 determined for

the previous year. In the Crl. R.C. No. 711 of 1955, I pointed out that the assessment made by the authorities on the basis to the best of his

judgment was not valid in that case because sufficient opportunity was not given to prove the correctness of the accounts for 1951-52. In this case

also after 16th March, 1954, he must be given a reasonable opportunity to produce the accounts which he says he has filed in the Small Cause

Court, Kozhikode. Although he has stated that he will produce very soon, he has to apply to the court for the return of the account books and it

will take two or three days. He must be given an opportunity to apply for the return of the books and produce them before the authorities to prove

the correctness of his statement. This opportunity has not been given to him. The assessment to the best of the judgment cannot therefore stand

under the circumstances. The lower court acquitted the respondent on the ground that there was no basis for the assessment on Rs. 50,000 as

turnover. It is not correct in holding that there is no basis. But in that case I have pointed out that the previous assessment was not a valid one and

the assessment on the basis of the previous invalidated assessment cannot therefore be held to be valid in this case also. For both the reasons I

must hold that the acquittal was justified. But it does not prevent the assessing authorities from giving the respondent an opportunity to produce the

accounts and if he fails to produce the accounts within the time allowed, and if the authorities are satisfied that he is evading to produce the

accounts, then they can proceed to assess under clause (2) of Section 9 of that Act. The acquittal is therefore justified and the appeal is dismissed.

Since reported as The Public Prosecutor v. K.P. Chandrasekharan [1957] 8 S.T.C. 6 .