LexRAGHUBAR MANDAL HARIHAR MANDAL versus THE STATE OF BIHAR
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S.C.R. SUPREME COURT REPORTS 37 BY COURT : In accordance with the Judgment of the 1957 majority Civil Appeal No. 322 of 1955 is dismissed The Commissio11er with costs and Civil Appeal No. 25 of 1955 is allowed 01 Income-tax, · h h · fi d · be" d · h Madhya Pradesh wit costs, t e re erre question mg answere m t e and Bhopal < negative. Sodr~· Devi -~- J .. RAGHUBAR MANDAL HARIHAR MAND AL v. THE STATE OF BIHAR (BHAGWATI, S. K. DAS and J. L. KAPUR JJ.) Sales Tax-Assessee's accounts rejected as unreliable-Assess- ment made 011 guess without reference to evidence or material- V alidity-Bihar Sales Tax Act, 1944 (Bihar Act VI of 1944), s. 10(2)(b)-Indian I11come-tax Act, 1922 (XI of 1922), s. 23(3). The appellant filed the necessary returns, as required by the provisions of the Bihar Sales Tax Act, 1944, and produced the account books. The Sales Tax Officer considered that the account books were not dependable and, after rejecting them as well as the returns, proceeded to estimate the gross turnover by adopting a figure by pure guess, without reference to any evidence or material, and made the assessment under s. 10(2)(b) of the Act. Held, that under s. 10(2)(b) of the Bihar Sales Tax Act, 1944, a duty is imposed on the assessing authority to make the assessment after hearing such evidence as the assessee may produce and such other evidence as the assessing authority may require on specified points, and, in case the returns of the assessee and his books of account are rejected, the assessing authority must make an estimate, but this must be based on such evidence or material as the assessing authority has before him, including the assessee's circumstances, knowledge of previous returns and all other matters which the assessing authority thinks will assist him in arriving at a fair and proper estimate. Dhakeswari Cotton Mills Ltd. v. Commissioner of Income Tax, West Bengal, (1955) l.S.C.R. 941 and Income-tax Commissioner v. Badridas Ramrai Shop, Ako/a, (1937) L.R. 64 I.A. 102, relied on . CIVIL APPELLATE JURISDICTION : Civil Appeal No. 249 of 1954. Appeal by special leave from the judgment and order dated January 8, 1952, of the Patna High Court in Misc. Judicial Cases Nos. 13, 14, 15, 16, 17, 18 and 19 of 1949. 1957 May22. 38 SUPREME COURT REPORTS [1958] 1957 Bhawam Lal and K. L. Mehta, for the appellants. RaghubarMandal L. K. Jha, B. K. P. Sinha and R. C. Parsad, for Hanh•~. Manda/ the respondent. . TheStateofBihar 1957. May 22. The Judgment of the Court was s. K. Das J. delivered by S. K. DAS J.-The appellant Messrs. Raghubar Manda! Harihar Manda!, hereinafter referred to as the assessee, is a firm of bullion dealers carrying on its business at Laheriasarai in the district of Dar- bhanga in the State of Bihar. The assessee was assessed to sales tax for seven quarters ending Dec- ember 31, 1945, March 31, 1946, June 30, 1956, Sep- tember 30, 1946, December 31, 1946, March 31, 1947 and June 30, 1947, respectively. For three of the aforesaid quarters, namely those ending on Decem- ber 31, 1945, March 31, 1947 and June 30, 1947, the assessee failed to file the necessary returns as required by the provisions of the Bihar Sales Tax Act, 1944 (hereinafter referred to as the Act), which was the Act in force during the material period; therefore, the assessee was assessed for those three quarters under sub-s. (4) of s. 10 of the Act. For the remain- ing four quarters, the assessee did file returns. The Sales Tax Officer rejected those returns as also the books of account filed by the assessee for all the seven quarters and assessed the assessee under cl. (b) of sub-s. (2) of s. 10 of the Act. The Sales Tax Officer passed separate orders assessing the tax for all the seven quarters simultaneously on October 9, 1947. He assessed the tax on a taxable turnover of Rs. 2,94,000 for each of the five quarters ending December 31, 1945, March 31, 1946, September 30, 1946, December 31, 1946 and March 31, 1947; for the other two quarters ending on June 30, 1946, and June 30, 1947, he assessed the tax on a taxable turnover of Rs. 3,92,000. The assessee then moved in appeal the Commissioner of Cpmmercial Taxes, Tirhut Division, but the Commis- sioner dismissed the appeals by his order dated February 23, 1948. The Board of Revenue was then moved in revision but, by its order dated July 31, 1948, the Board refused to interfere. The Board expres
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