The assessee is required to maintain stock accounts and unless he does so, he cannot claim that the stocks found in an unregistered godown are entered in the account books.

Headnote:
SALES TAX - SUPPRESSION OF SALES - UNREGISTERED GODOWN - STOCKS FOUND IN UNREGISTERED GODOWN - WHETHER CAN BE TREATED AS UNACCOUNTED STOCKS - WHETHER CAN BE TREATED AS SUPPRESSION OF SALES - TAMIL NADU GENERAL SALES TAX ACT, 1959 - SECTION 12(3).
Fact of the Case:

The assessee, a dealer in brasswares and stainless steelwares, was found to have kept stocks in various unregistered places. The assessing officer treated the goods kept there as unaccounted sales and the deficit stock found in the place of business as suppression. The Appellate Assistant Commissioner sustained the addition of Rs. 1, 86, 612 as suppressed turnover and also made an equal addition for the said suppression. The Tribunal deleted this addition.
Finding of the Court:

The court held that the assessee had not proved that the stocks found in the unregistered godown were entered in the account books. The court also held that the Appellate Assistant Commissioner was justified in making the addition of Rs. 1, 86, 612 as suppressed turnover.
Issues: Whether the stocks found in the unregistered godown can be treated as unaccounted stocks.
Ratio Decidendi: The court held that the assessee had not proved that the stocks found in the unregistered godown were entered in the account books. The court also held that the Appellate Assistant Commissioner was justified in making the addition of Rs. 1, 86, 612 as suppressed turnover.
Final Decision: The court restored the addition of Rs. 1, 86, 612 as suppressed turnover.

Judgment :-

In all these tax revision cases the department is the petitioner. The assessee is a dealer in brasswares and stainless steelwares of Thanjavur. For the assessment year 1980-81, the assessee reported a taxable turnover of Rs. 5, 32, 651.13. For the defects and omissions as detailed in the assessment order, the assessing officer has rejected the accounts of the assessee and determined the total and taxable turnover of the assessee at Rs. 32, 23, 671 and Rs. 27, 40, 507 respectively. The assessing officer also levied a penalty of Rs. 62, 628 under section12(3) of the Tamil Nadu General Sales Tax Act for the wilful omission noticed in the accounts. Corresponding surcharge and additional sales tax also were imposed by the assessing officer separately. Disputing the additions of Rs. 9, 95, 227 at 10 per cent, Rs. 12, 09, 492 at 4 per cent and the penalty of Rs. 62, 628 the assessee filed an appeal before the Appellate Assistant Commissioner, who modified the assessment and refixed the taxable turnover at Rs. 15, 32, 151 (Rs. 6, 48, 527 at 10 per cent and Rs. 8, 83, 624 at 4 per cent) and the penalty at Rs. 3, 165. The additional sales tax was fixed by the Appellate Assistant Commissioner at Rs. 10, 725. Aggrieved by the order of the Appellate Assistant Commissioner the assessee preferred a second appeal disputing the addition of Rs. 5, 92, 440 at 10 per cent, Rs. 4, 00, 044 at 4 per cent and penalty of Rs. 3, 165. The department filed an enhancement petition praying enhancement of the taxable turnover to Rs. 10, 51, 314 under 10 per cent and Rs. 15, 42, 480 under 4 per cent and the penalty to Rs. 61, 194. The details of Rs. 5, 92, 440 taxable under 4 per cent are as under :

Rs.

(a) Sales suppressions of stainless steelwares 5, 000 as per inspection on September 29, 1980.(b) Sales suppression of stainless steelwares 50, 142 as per inspection on May 9, 1980.

(d) Addition for probable omission 2, 68, 649

5, 92, 440

Addition of turnover of Rs. 5, 000 as per inspection on September 29, 1980 : towards sales suppression of stainless steelwares :

According to the assessing officer, the assessee purchased 50 kgs. of stainless steelwares worth Rs. 5, 000 at Madras without bills and booked them to Tanjore through railway parcel. On arrival of the goods at the place of business, the officers of the Enforcement Wing found that the assessee was not in possession of any bill or delivery note. According to the assessee, the purchase bill was received by post subsequently and duly entered in the accounts. At the time of inspection the officers found that the goods were not supported by any bill or delivery note. The assessee subsequently obtained the invoice by post and produced the same. Though it was not immediately posted in the book, according to the assessee, it was entered in the book subsequently. The Appellate Assistant Commissioner sustained the assessment on this turnover on the ground that the assessees have failed to account for the railway receipts. The fact remains that soon after the arrival of the goods the officers inspected the business premises. Without giving any further opportunity to the assessee to account for the arrival of the goods, the addition was made. Considering the facts that the assessee had produced the bill subsequently and the assessee was not given an opportunity to explain the Tribunal deleted the addition of Rs. 5, 000. The reason given by the Tribunal for deleting this addition appears to be an acceptable one. According, we are not inclined to interfere with the same.

2. Sales suppression of stainless steelwares as per inspection on May 9, 1980 - Rs. 50, 142 : The addition of Rs. 50, 142 consists the following items :

Rs.

(i) Overall discrepancy of 401.980 kgs. stainless steelwares 36, 178

(ii) Stainless steel piece rate articles unaccounted stock 2, 610

(iii) Sales suppression as per D7 records slip No. 8 9, 754

(iv) Sales suppression as

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