K.L Sharma, J.:— Sales Tax Revision No. 408 of 1989 under section 11 of the Trade Tax Act (hereinafter referred to as “the Act”) has been directed against the judgment and order dated March 15, 1989 passed by the Sales Tax Tribunal, Bench II, Meerut in second appeal No. 394 of 1988 (assessment year 1986-1987) and second appeal No. 712 of 1988 (assessment year 1986-1987) whereby the applicant's appeal was partially allowed and the taxable turnover was reduced to Rs. 6,50,000 and the cross appeal filed by the Commissioner of Sales Tax was dismissed.

2. The Commissioner of Sales Tax, U.P, Lucknow, has also filed a cross S.T.R No. 728 of 1989 for enhancement of the taxable turnover fixed by the Sales Tax Tribunal, Bench II, Meerut, while partially allowing the second appeal No. 712 of 1988. I have heard the learned counsel for the applicant Mr. Bharatji Agarwal and the learned Standing Counsel for the opposite party Mr. R.D Gupta assisted by Sri. M.N Rai departmental representative.

3. The sole point raised in this revision by Mr. Bharatji Agarwal is that the learned Tribunal has committed an arbitrariness like the assessing authority and the first appellate authority by fixing the taxable turnover at Rs. 6,50,000 for the assessment year 1986-87 (U.P). The learned Standing Counsel has replied that the learned Tribunal has been influenced by the past record of accepted turnovers and has rejected the element of imagination applied by the assessing authority and the appellate authority in fixing taxable turnover on the basis of the calculation of sales per day pursuance to the survey dated January 19, 1987.

4. I have perused the impugned order of learned Tribunal and I am glad to observe that the learned Tribunal has adopted good reasons for rejecting the arbitrary fixation of the turnover by the assessing authority and the first appellate authority. The learned Tribunal appears to have fallen into an error of fixing the taxable turnover on the basis of daily sales at Rs. 4,000 per day without any relevant material or basis of calculation. It is true that the learned Tribunal has considered the past record of assessment in the case of the appellant-revisionist but he had not given due weight to the past record of assessments which was finalised at the level of the Tribunal, Therefore the reference to the past record of assessments is just by way of one reasoning to reject the arbitrary fixation of turnovers by the lower authorities. If the Tribunal had given due weight to the past assessments in which the taxable turnovers were finalised by the Tribunal, this Court is sure that the taxable turnover would have been fixed near about 3.5 lacs rupees for the assessment year 1986-87 and it would not have gone to more than the double of the figure of the taxable turnover finally accepted for the year 1985-86. Therefore, what worries this Court is that element of arbitrariness had afflicted the impugned judgment of the Tribunal also. It appears that the learned Tribunal was probably helpless to find out any relevant material or any basis for calculation of the sales of the appellant-revisionist. Therefore in the state of helplessness, the Tribunal finding no alternative reduced the taxable turnover from Rs. 14 lacks to Rs. 50,000. The first appellate authority had reduced it to Rs. 26,250 from Rs. 14 lacks.

5. The survey report dated January 19, 1987 indicated the sales for three hours of a day at Rs. 1,384. The assessing authority calculated the daily sales for the whole working hours on that basis for 360 days. The reasons given by the assessing authority and also the first appellate authority for adopting the basis of calculation for the sales were of course examined with analytical mind by the Tribunal and the Tribunal was very much right to reject those reasons. The Tribunal has rightly observed that the sales cannot be calculated on the basis of working hours. The element of imagination or presumption cannot justify such a calculation. The realities of business life and market cannot be overlooked. The goods manufactured by the revisionist are such as are consumed almost daily. The retail sales are conducted in the morning and in the evening only. The whole sales of the breads, pastries and cakes are done generally in the afternoon for a few hours because the dealers come for wholesale purchase after they get time from retail sales in the morning with a view to obtain the goods for making retail sales in the next morning. Therefore, on the basis of the survey done for three hours in the afternoon of a particular day cannot be a proper guide for fixing daily sales on the full working hours. The Tribunal was very much right to reject the basis adopted by the lower authorities.

6. Now the question arises if there was no basis for calculation of the turnover after rejection of the account books, how could the taxable turnover be fixed by the learned Tribunal or the lower authorities. This Court has from time to time in particular cases indicated the relevant considerations for fixing the taxable turnovers when the account books of the assessee are wrongly or rightly rejected and the assessment is made on the best judgment basis. The assessment has to be made on the basis of cogent material and rational considerations. The element of guess work has to be avoided. The realities of business practices and market conditions must be taken into consideration in respect of the commodities with which the assessee is dealing. The approach of the taxing authority should be reasonable one so far as the determination of tax liability of the assessee is to be made. There should not be any indication in the best judgment assessment that the approach of the taxing authority has not been reasonable and fair and the assessment has been made in punitive and vindictive manner ignoring the relevant consideration and the guidelines furnished by the judicial authorities under the Act and the High Court.

7. In the case of Commissioner of Sales Tax v. Avadhraj Jagdamba Prasad, 1981 UPTC 379 this Court laid down that the past record of assessee is a relevant material for determining the taxable turnover for a certain assessment year. The learned Tribunal no doubt referred to the past record of assessment but appears to have ignored the same while fixing the turnover. Therefore this approach on the part of the learned Tribunal is not justified. It would be useful to mention that there is another relevant consideration for fixing the turnover of such items as are involved in the present case. These are consumable items. The turnover of the assessee can possibly be increased by two factors, namely either price rise in the raw material and consequential price rise in the selling rates of the finished goods, or the second factor can be the increase in the number of consumers. The second factor appears to be unapproachable because of the non-availability of the correct figure of the number of consumers of a particular items. This cannot be determined even on the basis of census because such figures are not so complied and if it is undertaken to determine such a figure, the correct figures of consumers will not be available and the element of imagination will again cripple. Therefore, what can serve the purpose practically and can be available handy is price rise, in addition to other relevant factors. The Tribunal or the assessing authorities can also take this relevant factor into consideration while enhancing the turnover of the assessee in comparison to the assessment for the previous year.

8. In the present case, the assessee was finally assessed at the taxable turnover of Rs. 3,10,800 for the assessment year 19.83-84, and at Rs. 3,50,000 for the assessment year 1984-85 and at Rs. 3,00,000 for the assessment year 1985-986. The assessment made by the Tribunal fixing the taxable turnover at Rs. 6,50,000 does not come nearby the figure of the last assessment. No reason has been mentioned as to why the taxable turnover has been fixed by more than double the taxable turnover finally fixed for the assessment year 1985-86. In the opinion of the Court, this turnover of course was likely to be increased if the price of the raw materials as well as consequential prices of the finished goods had increased during the assessment year 1986-87. Of course, there is no material available on record on behalf of the assessee to indicate whether there was any price rise or not. Therefore this was also not handy for the Tribunal to refer to this factor. However this can always be done by providing an opportunity to the assessee because even in the case of assessment made on the best judgment basis the assessee can always be directed to provide relevant material to the authority concerned for fixation of the taxable turnover despite the fact that the account books have been rejected. The entries in the account books which are not disputed can always be looked into and any other evidence which the assessee can provide will also be of great help to the assessing authority or the appellate authority for coming to a reasonable conclusion by adopting the rational and fair basis.

9. Therefore, I am of the opinion that the fixation, of the taxable turnover by the Tribunal at Rs. 6,50,000 for the assessment year 1986-87 suffers from element of arbitrariness and cannot be sustained. The matter has to be remanded to the Tribunal for rehearing and fresh decision in the appeal instead of remand to the lower authorities by providing opportunity to the assessee for bringing the necessary material on record so that the Tribunal can make a reasonable assessment for the year 1986-87.

10. Consequently, this revision No. 408 of 1989 is allowed and the impugned judgment and order dated March 15, 1989 passed by the Sales Tax Tribunal, Bench II, Meerut, in second appeal No. 394 of 1988 and second appeal No. 712 of 1988 is hereby quashed and the matter is remanded to the Trade Tax Tribunal, Bench II, Meerut, for fresh hearing and decision in the light of the observations made hereinabove as expeditiously as possible but not later than within 3 months from the date of the receipt of a certified copy of this judgment. As regards STR No. 728 of 1989, it is not possible for this Court to enhance the taxable turnover. In the connected Revision No. 408 of 1989, the matter is being remanded to the Tribunal for a fresh decision in the second appeal. The question of fixation of taxable turnover will now be decided by the learned Tribunal. Therefore this S.T.R No. 728 of 1989 is dismissed.

11. Let a certified copy of this judgment be placed in Cross STR No. 728 of 1989.

12. S.T.R No. 408 allowed and S.T.R No. 728 dismissed.