Yousuff Radio vs The Board of Revenue, Commercial Taxes

T. Ramaprasada Rao, C.J.—For the assessment years J968-69 and 1969-70, the appellant did not include in the assessable turnovers a

sum of Rs. 73,000 for the former year and Rs. 72,000 for the latter year. The Appellate Assistant Commissioner would agree with the appellant

that it would not be escaped turnover because the discovery itself was made on account of certain disclosures voluntarily made, on an affidavit

sworn to by the appellant before the Income Tax department and that as he retracted therefrom at a later stage, the burden of proof was on the

shoulders of the sales tax department to establish that there was an escapement as such. He, therefore, gave the benefit to the assessee and

excluded the above amounts from the assessable turnover. The Board of revenue suo motu revised the proceedings and set aside the orders of the

Appellate Assistant Commissioner.

The relevant facts which would appear from the records are that during the pendency of the Income Tax proceedings, the assessee gave a

sworn statement to the effect that the above two sums of Rs. 73,000 and Rs. 72,000 represented unbilled cash sales and that, thereafter, for

reasons known to the assessee, he retracted from it and attempted to prove before the Income Tax department that there were no sales in the

bargain but they were merely cash credits entered in the books of account and, therefore, they are not to be treated for the purpose of assessment

of income under the Income Tax Act.

The Appellate Assistant Commissioner thought that having regard to the proceedings before the Income Tax authorities and the later retraction

made by the assessee before them that the above sums did not represent the unbilled cash sales, but the total of cash credits availed of by him from

strangers, the sales tax department did not discharge the burden of proving that the aforesaid sums could be brought within the net of escaped

assessment. The Board of Revenue while viewing the order of the Appellate Assistant Commissioner held that the retraction on the part of the

assessee was motivated since by that time he could have sensed that an admission by a sworn statement that the aforesaid sums represented the

total of unbilled cash sales would attract sales tax and, therefore, obviously retracted from his original sworn statement and that would not be

sufficient for the assessee to claim the exclusion of the aforesaid sums from the net of assessable turnover. In those circumstances, they added the

aforesaid sums and cancelled the assessments of the Appellate Assistant Commissioner and restored the order of the original authority. It is against

this the present appeal has been filed.

Mr. Raju strenuously contends that as the Income Tax department is said to have been satisfied about the bona fides of the appellant when he

retracted from his sworn statement which was to the effect that the aforesaid sums represented unbilled cash sales, then such acceptance of bona

fides should equally merit acceptance here before us and ought to have been accepted by the Board of Revenue also. There is a fallacy in this

argument. The courses of taxation under the Income Tax Act and the Sales Tax Act are entirely different. Whilst in the former, the income of a

dealer is assessed to tax and is expected to be quantified by the Income Tax Officer under the Income Tax Act in accordance with the provisions

of that Act, the Tamil Nadu General Sales Tax Act ordains the assessing authorities functioning thereunder to bring to tax sales as such either found

in the books of account or agreed to be so by the assessee or otherwise proved to be so by circumstantial evidence. This is a case in which the

assessee has admitted in a sworn statement that the two sums of Rs. 73,000 and Rs. 72,000 representing sales for the two assessment years in

question represented unbilled cash sales. Excepting, as pointed out by the Board of Revenue, to avoid assessment proceedings made under the

Tamil Nadu General Sales Tax Act, we see no particular bona fides in the gesture or the attitude of the appellant in having retracted from a sworn

statement, which was the result of a voluntary act on the part of the assessee. It is not even alleged that at the time when the sworn statement was

made by him, he was compelled or coerced to make it. On the other hand, he wanted to escape the fangs of the Income Tax Act by suitably

retracting from his sworn statement and stating that they were cash credits and not the total of unbilled cash sales. Obviously, it suited him to do so

before the Income Tax authorities. Having had the advantage, which we are not sure whether he did have, the retraction of the sworn statement is

pressed into service before us as was attempted before the Appellate Assistant Commissioner. An assessee cannot reprobate and approbate. If

that could be done and if it is possible in law, then every assessee can escape at every possible inconvenient stage from the force of the taxing

provisions because he could make suitable statements at opportune moments to help his cause and get out of the net of taxation. Once a voluntary

overt act results in a sworn statement, it should be given effect to and an opportunity ought not to be given to the assessee to retract therefrom

unless there is some suspicion, proved and circumstantial, available at the time when such a statement was made. No such significant circumstance

is present in the instant case. Therefore, we are of the view that for the simple reason that it suited the assessee to retract from his statement before

the Income Tax authorities, that situation should not prevail and cause the assessing authorities under the Tamil Nadu General Sales Tax Act also

to accept such retraction and the result thereof. We agree with the Board of Revenue that such an attempt to retract from the sworn statement was

made possibly to avoid the inclusion of the aforesaid amounts in the assessable turnover under the Tamil Nadu General Sales Tax Act and the

Board of Revenue was right in having included the amounts as the turnovers for the relevant years.

The appeals are dismissed.