JUDGMENT The judgment of the Court was delivered by V. V. KAMAT, J. - This Court has taken the view, in appropriate cases, that merely because for the purpose of avoiding prosecution the assessee admits the guilt and shows readiness to compound the situation, the same cannot be a complete stumbling-block or as an edifice for the authorities to rush to the process of estimation. 2. This is what has happened in these proceedings because the two appellate authorities have resorted to the question of estimation and addition in regard thereto on the assumption that the resort is taken as a closed door affair. 3. For the assessment year 1988-89, the assessee returned form No. 8 showing total turnover at Rs. 11,18,792.05. The assessee is the proprietor of a jewellery business in the name and style "K. G. P. Jewellery" situated at Mutoor, near about Kalady. 4. The books of accounts produced were rejected, on the basis of the inspection dated January 28, 1989 by the Intelligence Squad, Mattancherry, leading to the subsequent verification of the books of accounts produced in the light of the details gathered by inspection. The date, January 28, 1989, is at the fag end of the assessment year practically. 5. We get material with regard to the resort to rejection of accounts and consequent proceedings to resort to estimation from the order of the Assistant Commissioner (Assessment)-II, Special Circle, Mattancherry (annexure I). Firstly, 4.525 gms. of, new gold ornaments were in excess and secondly, 264.210 gms. of silver ornaments were found in excess. The very figure showing the quantity of excess would give us the idea in the context of the returned total turnover of Rs. 11,18,792.05. Silver, which is normally understood in terms of "kilo" and not of "grams", is also shown to be of 264.210 gms. of excess. 6. On the second count, purchase and sale suppression that too of Rs. 1,240 with regard to the sale of gold ornaments weighing 4 gms. and of Rs. 5,715 in regard to the purchase of old ornaments weighing 10,050 gms. is alleged with reference to slip No. 1. With reference to slip No. 8, sale of gold ornaments valued at Rs. 1,294.25 is pointed out. The daily sales were found to be around Rs. and of Rs. 5,715 in regard to the purchase of old ornaments weighing 10,050 gms. is alleged with reference to slip No. 1. With reference to slip No. 8, sale of gold ornaments valued at Rs. 1,294.25 is pointed out. The daily sales were found to be around Rs. 600 and was considered to be too low in a jewellery shop in spite of the situation that there was heavy cash balance at the end of each day. This heavy cash balance also forms part of the items justifying resort to best judgment assessment. They are as follows : -------------------------------------------------------------------- Month Cash balance Total sales during the month -------------------------------------------------------------------- Rs. Rs. April 2,03,187.16 26,496.85 May 1,70,925.91 26,643.75 June 1,66,617.22 25,917.50 July 1,43,555.92 27,112.50 August 21,847.77 25,014.90 September 1,51,201.47 25,087.85 October 1,06,792.32 28,268.20 November 1,54,061.02 24,511.80 December 1,52,479.97 20,794.85 January 1,27,342.16 19,084.40 February 1,44,857.89 17,033.65 March 84,057.44 19,447.20 At the close of the year as on 31-3-1989 1,46,255.86 -------------------------------------------------------------------- A bare perusal of the cash balance in the concerned column and total sales during the month with regard to the period from April to March of the year in question would show regularity of the process and would provide sustenance to the contention regarding daily sales being around Rs. 600. 7. It is from this material, the inferences are sought to be drawn. They are, firstly, there was substantial cash balance on every day in the jewellery section in addition to the cash balance in China clay section, which, was shown as kept idle as per the accounts. Loan was seen taken from the bank paying huge interest; secondly, it is observed that there is always a relationship between the running stock and the annual sales turnover in a jewellery business and the situation was in the nature of an exception. It is specified in the order of the Sales Tax Officer, in the following manner : Average stock value Rs. 9,88,844.00 Average stock of gold 3614.25 gm. do. of silver 944.25 " Total sales turnover reported Rs. 2,05,913.75 Sale of silver reported 92.2 " Sale of gold ornaments reported 908.00 " The situation appears to have resulted in the issuance of notice to invite objections, which were received by the letter dated December 23, 1989. 9,88,844.00 Average stock of gold 3614.25 gm. do. of silver 944.25 " Total sales turnover reported Rs. 2,05,913.75 Sale of silver reported 92.2 " Sale of gold ornaments reported 908.00 " The situation appears to have resulted in the issuance of notice to invite objections, which were received by the letter dated December 23, 1989. A detailed reply is given by the assessee firstly with regard to the variations in stock noticed by inspection, secondly with regard to the sale and purchase suppression evidenced by business slips, thirdly by low turnover compared to the stock-in-trade, fourthly with regard to gross loss and huge cash balance, fifthly relating to concessional rate of tax and lastly relating to estimation of turnover. In spite of a detailed reply, the assessing authority reached a conclusion that the proposal needed no modification. 8. The appellate authority accepted the position that the inspection was conducted on January 28, 1989 at the fag end of the year in question. It is also emphasised that for the previous year, 1987-88, the accounts were found alright and accepted by the assessing authority. It is also emphasised that in regard to the said previous year, the conceded turnover was Rs. 2,03,228.90. It is also observed that even during the previous year, there was no silver sales and silver sales accounted for the year in question was Rs. 599.30. 9. The first appellate authority also took into consideration that the suppression worked out to Rs. 11,369.30 up to January 28, 1989. It has also observed that no pattern of suppression was detected by the assessing authority. In spite of this situation, the jurisdictional question, as to whether the factual matrix offers any kind of justification whatsoever to resort to rejection of accounts and proceed to best judgment assessment, has not even been considered, is a question of addition. 10. The Sales Tax Appellate Tribunal, Additional Bench, Ernakulam, in the appeals filed both by the assessee as well as by the Revenue, has also not considered the lifting up of the veil and has mechanically dwell upon the smallness of the suppression detected at the fag end of the year and that too for the purpose of considering the required addition. 11. In our judgment, rejection of accounts and resort to best judgment are not matters that become a closed door situation and to be accepted as a matter of course. 11. In our judgment, rejection of accounts and resort to best judgment are not matters that become a closed door situation and to be accepted as a matter of course. It should not appear that the appellate authority should accept the fact of rejection of accounts and resort to best judgment assessment as a situation that cannot be disturbed any time in any situation. In our judgment, it is a jurisdictional situation on which the question of addition and estimation is basically founded. If the rejection is unjustifiable on the basis of the factual matrix, the entire subsequent exercise in the matter of use of discretion and the best judgment in regard thereto must fall as a pack of card automatically. It is for this reason that we have spelt out certain factors. The material on record shows that for the previous years, the accounts wore accepted. During the previous year, the returned conceded turnover was Rs. 2,05,913.75. During the year in question, it is Rs. 11,18,792.05. In our judgment, the authorities should have shuddered in the context of the background, much more so in freely resorting to estimation of judgment to determine it to a figure of four times thereof at Rs. 47,88.250 as if the assessee, who has a jewellery shop at a place away from Kalady, has committed a crime for being engaged in the jewellery business. We say so because the material on record floating on the surface leads to no other inference in the context. If for the excess of 4 gms. of new gold ornaments and 264 gms. of silver ornaments and differences of Rs. 1,240 and Rs. 5,715 with reference to slip No. 1 and Rs. 1,294.25 with reference to slip No. 8 the assessee-jewellery is to be assessed in this way, we are left with no other situation other than to consider it as a call of the requirement for interference in regard thereto. The authorities would have kept out of their mind that the assessee though a jewellery in the yellow metal and white metal has been accepted by the department in regard to all that is stated not far off but in the previous year itself. As compared to the previous year, he had shown taxable turnover at five times in comparison. The authorities would have kept out of their mind that the assessee though a jewellery in the yellow metal and white metal has been accepted by the department in regard to all that is stated not far off but in the previous year itself. As compared to the previous year, he had shown taxable turnover at five times in comparison. In our judgment, the facts do not warrant rejection of accounts much less the consequent resort to estimation on best judgment. 12. For all the above reasons, we quash and set aside all the three orders, viz., the order dated December 29, 1989 (annexure I), the order dated May 8, 1990 (annexure II) and the order dated December 8, 1993 (annexure III) and consequently direct the appellate authority to proceed with the assessment on the basis of the total turnover at Rs. 11,18,792.05 as returned by the petitioner-assessee in form 8 in the matter of the assessment year 1988-89. The revision case succeeds accordingly. Petition allowed.