COMMISSIONER, SALES TAX, U.P. versus M/S MOHAN BRICKFIELD, AGRA

Citation: [2006] SUPP. 8 S.C.R. 1108 · Decided: 13-11-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
COMMISSIONER, SALES TAX, U.P. 
v. 
MIS MOHAN BRICK.FIELD, AGRA 
NOVEMBER 13. 2006 
B 
[ARIJIT PASAYA T AND LOKESHWAR SINGH PANT A, JJ.] 
Uttar Pradesh Trade Tax Act, 1948: 
Sections 11, 12 and 13-Books of accounts-rejection of at the time of 
C assessment on the ground of non-production of the same at the time of survey 
and other grounds-Tribunal upheld the rejection-In Revision, High Court 
held that rejection was not correct as production of the books of accounts 
at the time of assessment made non-production of the same at the time of 
survey inconsequential-On appeal, held: Interference by the High Court not 
D permissible-Rejection of the account was not based alone on the non-
production of the same at the time of su111ey, but also other factors-Production 
of the books of accounts at the time assessment does not take away the effect 
<.?f non-production at the time of survey-On such non-production adverse 
inference can be drawn against the assessee. 
E 
Section I 1-Revisional Power of High Court-Scope of-Held: 
Revisiona/ power of High Court is limited to interference with the order of 
Tribunal only on the question of law. 
Respondent-assessee was in the business of manufacturing and sale of 
bricks. During the surveys of the business premises, the books of accounts 
F were not produced. The same was produced at the time of assessment. 
Assessing Officer rejected the books of accounts in view of the non-production 
of the same at the time of survey opining that they were not maintained in the 
regular course of business. The books were rejected also on account of two 
other factors. In the appeal of the assessee, before Assessment Commissioner, 
G sale rate was fixed after determining the average sale. In appeal by the 
assessee as well as the Revenue, Tribunal held that the rejection of the 
accounts was justified. In revision application, High Court held that as no 
defect was pointed out in respect of the books of accounts at the time 
assessment, non-production of the books of accounts at the time of survey 
H 
1108 
I 
COMMISSIONER, SALES TAX, U.P, v. MOHAN BRICKFIELD, AGRA 
1109 
was of no consequence. Hence the present appeal. 
Allowing the appeal, the Court 
HELD: 1.1. High Court proceeded on erroneous premises to hold that 
rejection of accounts was only on the ground of non-production of accounts at 
A' 
the time of survey. (1112-A] 
B 
1.2. Non-production of the books of accounts at the time of survey is a 
factor which can be taken into consideration by the Assessing officer while 
examining the return to find out whether the same is incorrect or incomplete. 
Production of books of accounts at the time of assessment does not take away 
the effect of non-production at the time of survey. Such non-production is a C 
relevant factor which can be considered by the Assessing Officer while 
considering whether the books of accounts are to be accepted as to have been 
maintained in the regular course of business. It is incumbent upon the 
assessee to offer plausible explanation as to why they were not produced at 
the time of survey. The burden is on him to show as to why no adverse inference D 
should be drawn. (1119-A-CJ 
1.3. Order of High Court is not sustainable even in view of Sections 12 
and 13 ofUttar Pradesh Trade Tax Act, 1948. Power to order production of 
accounts and powers to entry and inspection are provided in Section 13. 
Section 7(3) empowers the Assessing Officer to make an assessment to the E 
best of his judgment if no return is submitted or return submitted by the 
assessee appears to him to be incorrect or incomplete. Section 12 mandates 
a dealer to keep and maintain true and correct accounts. Obviously, the books 
of accounts are to be kept at the place of business. If they are not kept at the 
place of the business, the power of inspection in terms of Section 13 becomes 
redundant. Sub-section (4) of Section 13 empowers the officer of the authority F 
to enter and search any place or any other building or place where he has 
reason to believe that the dealer keeps or for the time being keeps any 
documents and accounts relating to his business. The expression "place of 
business" is defined in Section 2(c)(l). The definition is an inclusive one and 
includes any place where a dealer keeps his books of accounts. 
(1118-E-H; 1119-AI G 
2. Section 11 of the Trade Tax Act which confers limited jurisdiction to 
interfere with the order of the Tribunal only on the question of la

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