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1. In this reference under section 34 of the Bombay Sales Tax Act, 1953 (hereinafter referred to as the Act), the following two questions have been referred to us by the Sales Tax Tribunal :-

"(1) Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that the principles of natural justice were not violated by the Sales Tax Officer in not recording statements of A. Alibhai and Company and the Angadia and not giving opportunity to the applicant-firm of cross-examining them.
(2) Whether on the facts and in the circumstances of the case the Tribunal was justified in making an estimate of the turnover of sales higher than the detected suppression of sales."

2. The facts leading to this reference are as follows :

3. The applicant-firm, the assessee, is a partnership firm carrying on the business of manufacturing and dealing in art-silk ribbon. The said firm as assessed for two periods from 1st April, 1955, to 31st March, 1956, and 1st April, 1956, to 31st March, 1957, and the assessment orders were passed in respect of those two separate periods of assessment. Later on, the Sales Tax Officer, Enforcement Branch, Bombay, seized certain account hooks of M/s. A. Alibhai & Co. of Bombay. Books Nos. 1 and 4 out of the seized books were uplak books containing certain transactions with different persons, the applicant-firm being one of them. These books were sent to the Sales Tax Officer, Surat, who also obtained extracts from the record of one Angadia through whom the applicant-firm is said to have despatched goods to A. Alibhai & Co. We may mention that an Angadia carries goods from one place to another for a consideration and usually carries these goods by railway trains. On scrutiny of the books of account of the assessee-firm in the light of the entries contained in the uplak books of A. Alibhai & Co. and the extracts from the record of the Angadia, the Sales Tax Officer came to the conclusion that the applicant-firm had suppressed sales of certain goods. The turnover of the assessee-firm as assessed previously was Rs. 83,350 in 1955-56. The suppression which was detected was to the extent of Rs. 7,712. The Sales Tax Officer came to the conclusion that the assessee has suppressed the sales to the extent of Rs. 8,335. So far as the assessment year 1956-57 was concerned, the turnover assessed at the time of the original assessment was Rs. 1,36,634. The suppression which was detected for the year 1956-57 was Rs. 761. The Sales Tax Officer estimated the suppressed sales for 1956-57 at Rs. 13,668. The turnover of escaped purchases was estimated at two-thirds of the turnover of the estimated suppressed sales. The escaped turnover was thus determined and assessment orders were passed accordingly.

5. It is common ground before us that at the time when the reassessment proceedings in pursuance of the notice issued in that behalf were going on, the materials were gathered from the uplak books of M/s. A. Alibhai & Co. and the statements were prepared from the materials placed before the Sales Tax Officer by the Angadia. The materials from both these sources were made available to the assessee-firm and thereafter the assessment proceedings were carried on before the Sales Tax Officer and other superior authorities. The Tribunal has observed that the uplak books were found at the time of search of A. Alibhai & Co. and these books contained khata of different persons including the assessee firm. The khata showed that Jayantilal had effected transactions of sale in favour of A. Alibhai & Co. The extracts from the record of the Angadia showed that the goods were despatched by Jayantilal to A. Alibhai & Co. The Tribunal pointed out that there were regular transactions between the assessee-firm and A. Alibhai & Co. in the course of which goods were despatched through the same Angadia as the Angadia from whose record the extract was taken out before the reassessment proceedings. These regular transactions were found to have been duly entered in the account books of the assessee-firm as well as in the regular account books of A. Alibhai & Co. The transactions entered in the uplak books of A. Alibhai & Co. were neither entered in the books of account of the assessee-firm nor in the regular account books of A. Alibhai & Co. Now, the extract of the khata of M/s. Jayantilal Thakordas & Bros. maintained by Angadia showed that certain amounts were received by the Angadia on particular dates from M/s. Jayantilal Thakordas & Bros. It was found at the time of the arguments before the Sales Tax Tribunal that some of the entries which were found in the khata of Jayantilal Thakordas & Co., as maintained by the Angadia, had corresponding debit entries in the account books of the assessee-firm as having been paid by the assessee-firm to the Angadia. According to the Tribunal these debit entries in the account books of the assessee-firm clearly established beyond reasonable doubt that the khata maintained by the Angadia in the name of Jayantilal Thakordas & Co. was the khata of the assessee-firm, viz., Jayantilal Thakordas & Bros. From that conclusion the Tribunal held that the goods shown in the extract of the Angadia account were despatched by the assessee-firm to A. Alibhai & Co. through this Angadia and payments for transport of goods were duly made by the assessee-firm to the Angadia in respect of those goods. Some of the sales in respect of the goods handed over to the Angadia were duly entered in the account beaks of the assessee-firm. The sales which were not entered in the account books of the assessee-firm were sales entered in the uplak books of A. Alibhai & Co. and regarding the uplak books of A. Alibhai & Co. and the extract from the account of Jayantilal Thakordas & Co. in the record of the Angadia, the Tribunal came to the conclusion that the transactions of Jayantilal Thakordas & Co. were the transactions of sales effected by the assessee-firm carrying on the business in the name of Jayantilal Thakordas & Bros. These were the conclusions on questions of fact arrived at by the Tribunal on the materials before it.

6. It was urged before us, as had been urged before the Sales Tax Tribunal and other authorities, that no opportunity of cross-examining any person from the firm of Angadia or from the firm of A. Alibhai & Co. was given to the assessee-firm It was contended before us that what was made available to the assessee was the extract from the uplak books of A. Alibhai & Co. and extract from the record of the Angadia. The assessee-firm also relied on the fact that a letter from A. Alibhai & Co. was produced by the assessee-firm before the Sales Tax Officer and the letter was to the effect that there were no dealings between A. Alibhai & Co. and the assessee-firm other than the transactions stated in the books of account of the assessee-firm. The Tribunal held that this statement of A. Alibhai & Co. did not give any explanation whatsoever regarding the uplak books and the transactions entered therein. According to the Tribunal, it was not possible to construe this statement of A. Alibhai & Co. in the form of a letter as meaning either that the uplak books did belong to A. Alibhai & Co. or that the transactions entered therein were not the transactions of the assessee-firm. Thus, the Tribunal also took into consideration the material which was brought on the record by the assessee at the time of the reassessment proceedings, and after weighing that piece of evidence in the light of the other materials before it, it decided not to place any reliance on that particular material, viz., the statement in the form of a letter produced by the assessee from A. Alibhai & Co.