JUDGMENT H.N. Seth, J.
1. This petition under Article 226 of the Constitution is directed against a notice dated 4th September, 1973, issued by the Sales Tax Officer, Shahjahanpur Circle, requiring the petitioner to show cause why penalty under Section 15-A of the U. P. Sales Tax Act, 1948, be not imposed.
2. The petitioner, M/s. Ram Dayal Chhotey Lal, is a partnership-firm registered under the U. P. Sales Tax Act and deals in iron, steel, cement and iron goods. The dispute in this case is about an alleged deliberate concealment by the petitioner of its turnover and furnishing of wrong particulars in its return for the assessment year 1970-71. For the assessment year in question, the petitioner submitted tax return declaring its gross and taxable turnovers at Rs. 3,03,632.52 and Rs. 2,39,101.13 respectively. The Sales Tax Officer rejected the assessee's books and made a best judgment assessment determining its taxable turnover as Rs. 5,30,000 on which the tax amounting to Rs. 19,925.00 was payable. He then issued the impugned notice on 4th September, 1973, to the petitioner stating that it had given wrong particulars and had concealed its turnover of the sales in its return. Accordingly, it was required to show cause why a penalty as contemplated by Section 15-A of the U. P. Sales Tax Act be not imposed upon it.
3. Section 15-A of the Act entitles the assessing authority to impose penalty on an assessee, inter alia, if he is satisfied that the assessee has concealed the particulars of its turnover or has deliberately furnished inaccurate particulars of such turnover. The case of the petitioner is that there was absolutely no material before the Sales Tax Officer on the basis of which he could be satisfied that it had concealed the particulars of his turnover or had deliberately furnished inaccurate particulars of such turnover.
4. He had, therefore, no jurisdiction to issue the impugned notice. According to the petitioner, merely because the Sales Tax Officer rejected its books and made a best judgment assessment, it did not mean that it had concealed any particulars of his turnover or that it had deliberately furnished a wrong particular.
5. The Sales Tax Officer has appeared to contest the petition and has filed a counter-affidavit stating the material acting upon which he proceeded to issue the impugned notice. The counter-affidavit clearly shows that the only reason why the Sales Tax Officer thought that the petitioner had furnished wrong particulars of its turnover or had concealed any part of it was that its books had been rejected and it had been assessed on a higher turnover. It is not necessary for us to recapitulate the reasons why the petitioner's books were held to be unreliable and for purposes of this petition it may be taken that there was good reason for rejecting them and to make a best judgment assessment. The question that remains to be considered is whether merely because there was some defect in the assessee's books which justified their rejection and making of best judgment assessment, it necessarily followed that the assessee had concealed the particulars of its turnover or had deliberately furnished inaccurate or false particulars thereof in the return filed by it. In our opinion, merely because the assessee's books of account had not been accepted and a best judgment assessment is made at a figure higher than that indicated in the assessee's turnover, it does not mean that the turnover disclosed by the assessee was necessarily wrong. It is possible that the assessee might have truthfully disclosed its turnover and given full particulars thereof in its return, yet its books might be rejected for some defect in the method adopted in maintaining them or because the circumstances indicate that it would not be safe to rely upon them, thereby enabling the Sales Tax Officer to make a best judgment assessment and to assess its turnover at an amount higher than that disclosed in the return. In such a case, higher amount of tax is demanded from the assessee not because there was concealment or furnishing of wrong particulars in the return, but because the assessee did not maintain its accounts properly and the estimate of its turnover made by the Sales Tax Officer was higher than that disclosed in the return. Burden of showing that the turnover declared by the assessee was necessarily wrong is on the department. If such a conclusion is to be drawn against the assessee, the least that is expected of the Sales Tax Officer is that he would intimate to the assessee as to which particular mentioned in its return appears to be wrong so that the assessee may be in a position to explain it. But, in this case, no such particular was either given or could be given merely because the assessee's books were held to be unreliable and the petitioner was assessed on the basis of best judgment. We are accordingly not satisfied that there was any material on the basis of which the Sales Tax Officer could have reason to believe that the assessee had concealed any part of its turnover or any particulars furnished by it in the return was wrong. Accordingly, he had no jurisdiction to issue the impugned notice. If the Sales Tax Officer has some other material in his possession on the basis of which he could be satisfied that the particulars of the turnover disclosed by the assessee were wrong or that it had deliberately concealed some particulars, he may, if it is open to him under the law, re-commence the proceedings by issuing fresh notice in accordance with law.