Accounts maintained in the course of business should be considered correct unless proven unreliable, and rejection of accounts and assessment to best of judgment are distinct processes.

1. The petitioner in this tax revision case is the assessee, the firm registered under the Indian Partnership Act, 1932. Besides running an oil mill it is also engaged in the hulling of paddy for persons who bring it for conversion into rice. The accounts of the petitioner for the year 1964-65 were rejected by the Sales Tax Officer and the turnover was estimated to the best of judgment by making an addition of 10% to the disclosed turnover. The appeal preferred by the petitioner before the Appellate Assistant Commissioner was dismissed. In further appeal before the Sales Tax Appellate Tribunal the action of the assessing authority in rejecting the accounts was upheld, but the Appellate Tribunal felt that the addition of 10% to the turnover as such could not be justified. It directed the assessment to be modified on the basis of the electric current consumption. According to the Tribunal, the current consumption indicated that the petitioner would have crushed 2792 quintals of copra, whereas the petitioner had accounted only for 2567 quintals. The Tribunal directed the addition of the sale value of oil and cake produced from 225 quintals of copra representing the difference.

2. The contention raised before us is that the authorities below were not legally justified in rejecting the accounts merely on the ground that the consumption of electric current per quintal of copra crushed varied in certain months, that the alleged variation in the consumption of electrical energy could not lead to any inference of suppression of turnover and that the consumption of electricity depends upon various factors.

3. The Sales Tax Officer rejected the accounts on two grounds; firstly, that there was difference in the turnover as between the returned figure and that disclosed by the accounts and secondly that there was variation in the consumption of electricity in different months. The petitioner explained the difference between the returned figure and that in the accounts as due to a clerical error. The turnover returned by the petitioner was Rs. 9, 62, 652-66, while as per the accounts it was Rs. 9,56,624-30. The difference being only about Rs. 6000/-and the returned figure being actually higher than the figure in the accounts, we fail to see how this circumstance could be relied on as indicative of the unreliability of the petitioner's accounts. The Tribunal, probably because of this circumstance merely mentions in the order this circumstance without specifically indicating whether it disbelieved the explanation offered by the petitioner. We feel that the explanation should have been accepted. Or, at any rate, it appears to be too trivial to be made the basis for the rejection of the accounts. The Tribunal's order indicates that the real ground on which it justified the rejection of accounts is the variation in the consumption of electricity. Therefore, the question that arises for consideration is whether the variation in the consumption of electricity can by itself be taken as sufficient for discrediting the accounts.

4. The learned counsel for the petitioner brought to our notice the decision of the Andhra Pradesh High Court in N. Raja Pullaiah v. Deputy Commercial Tax Officer, 73 I.T.R. 224 and contended that the consumption of electricity by itself cannot form a reliable test for determining the yield of oil, that the yield depends upon various factors like the condition of the machine, the quality of copra whether it was dried or moist the nature of the electric supply and other similar factors and that the consumption of electricity is affected by these and various other factors. It was also contended that no test-crushing had been done in this case and the department itself had accepted in other cases figures varying from 10 to 12 units per quintal of copra. In the petitioner's case, the average works out to 12 units per quintal. On behalf of the Revenue it was urged that the rejection of the accounts was justified since the