JUDGMENT Hon’ble Yashwant Varma, J.—Heard Sri Rahul Agarwal, learned counsel for the revisionist and Sri B.K.Pandey, the learned Standing Counsel. 2. These two revisions with the consent of parties have been taken up for disposal together as both pertain to Assessment Years 2008-09. While Sales/Trade Tax Revision No. 942 of 2011 relates to the assessment proceedings taken against the revisionist for tax under the U.P. VAT Act, 2008 (Act, 2008), Sales/Trade Tax Revision No. 941 of 2011 relates to the consequential assessment undertaken with reference to the entry tax liability of the revisionist under the provisions of U.P. Tax on Entry of Goods Act, 2008. The Tribunal in terms of the order impugned has proceeded to uphold the action of the assessing authority which had proceeded to reject the books of account as maintained by the assessee and has consequently undertaken a best judgement assessment coming to hold that turnover of Rs. 2,35,00,000/- had escaped assessment and consequently levied additional tax. The quantum of escaped turnover had been reduced by the Tribunal to Rs. 14,00,000/-. 3. The facts which are not in dispute are as follows: The assessee is stated to be a partnership firm which is engaged in the business of manufacture and sale of Gutkha. It is stated to have commenced its manufacturing operations on or about May 2008. For the relevant assessment year the requisite declaration in respect of purchases and sales were made. The business premises of the assessee are said to have been surveyed on 5 May 2008 and 12 August 2008 and it is the material gathered during the course of the survey so undertaken which formed the bedrock of the proceedings subsequently taken by the assessing authority. From a reading of the order of the Tribunal the following facts emerge. During the course of the survey undertaken, it was found that the difference in the quantity of raw material as actually found and duly recorded, was of 227.24 Kgs. Similarly, in respect of the finished product the survey team noted that the quantity thereof was shown as 1596.795 Kgs whereas the actual quantity of finished product was found to be 4417 Kgs. It is not disputed (and this fact is so recorded even by the Tribunal) that the relevant books of account and other records were produced for the inspection of the survey team. It is not disputed (and this fact is so recorded even by the Tribunal) that the relevant books of account and other records were produced for the inspection of the survey team. In fact, the Tribunal notes that the survey team did not record at any place that documents were not provided to them or that certain documents or records which may have been demanded were not produced. The Tribunal then proceeds to record that apart from the relevant books of account which were demanded and so shown to the survey team other relevant material also appears to have been presented to the survey team and there is no certification by the members of the survey team that any document which may have been called for was not produced. 4. Sri Rahul Agarwal, learned counsel for the revisionist has assailed both the rejection of books of account by the assessing authority as well as the best judgment assessment which was undertaken thereafter. He submits that the discrepancy in the declared value of raw material and the actual quantity of raw material which is stated to have been found by the inspecting team during the course of survey was minuscule and represented only 0.67 per cent. He submits that this minuscule difference in the quantity of raw material could not have formed a basis for the rejection of the books of account maintained by the assessee. Sri Agarwal, learned counsel then submits that the explanation which was proffered by the assessee for the discrepancy in quantity was neither adverted to nor considered either by the assessing authority or the Tribunal. This, he submits, is evident from the explanation advanced that the discrepancy in the quantity of finished products was on account of the day’s production having been added by the survey team as also its failure to note that part of the raw material which was duly recorded in the books of account had also been utilized in the course of manufacturing operations which were ongoing at the time of the survey. He submits that in any view of the matter no ulterior motive could be attributed to the revisionist in declaring the complete details of raw material and allegedly seeking to suppress the quantity of the final product. He submits that in any view of the matter no ulterior motive could be attributed to the revisionist in declaring the complete details of raw material and allegedly seeking to suppress the quantity of the final product. He submits that considering the very intrinsic characteristics of the VAT regime, there can possibly be no advantage to a dealer to suppress the quantity of raw material while declaring the entire quantity of the final product. This he submits in light of the provisions of the Act which enables a dealer to claim Input Tax Credit (ITC) and thus claim a set off of tax already paid on goods which have been utilized in the manufacture of the final product. Assailing the estimation of escaped turnover, Sri Agarwal submits that the case of the revisionist was that all the thirty eight machines which were found installed in the business premises were not working at the time of survey. They were under repair and maintenance. Despite the above, Sri Agarwal submits, the escaped turnover has been worked out on the basis as if all the machines were functioning at the relevant time. He further submits that the unit of the assessee had commenced operations only in 2008 and therefore this was also a factor which should have weighed with the respondents while estimating escaped turnover. He has drawn the attention of the Court to the fact that although the Tribunal does accept the explanation of the assessee that the thirty eight machines were not actually functioning at the time of survey, it has not given any benefit to the assessee on this score. He lastly submits that although the Tribunal has reduced the escaped turnover as assessed by the assessing authority, even this estimation of the Tribunal is not based on any empirical exercise nor is it referable to any material or record that may have been maintained by the assessee. 5. Countering the said submissions, Sri B.K. Pandey, learned Standing Counsel submits that the material which was found in the course of the survey operations, was sufficient to enable the assessing authority to form an opinion that the business transactions of the assessee were not being faithfully or truthfully recorded in the books of account. 5. Countering the said submissions, Sri B.K. Pandey, learned Standing Counsel submits that the material which was found in the course of the survey operations, was sufficient to enable the assessing authority to form an opinion that the business transactions of the assessee were not being faithfully or truthfully recorded in the books of account. He submits further that the discrepancies in the declared quantity of raw material as well as the finished product, was based upon facts which were actually gathered in the course of the survey operations and therefore there was no occasion for this Court to interfere with the same. Sri Pandey, lays stress upon the fact that the Tribunal has reduced the escaped turnover to a large extent and therefore contends that there is no occasion for the Court to interfere with the ultimate imposition of additional tax as mandated in terms of the order of the Tribunal. 6. A best judgment assessment is undertaken by the assessing authority by virtue of the powers which stand conferred by Section 28 of the 2008 Act. As would be evident from a reading of Section 28(2)(ii), the assessing authority proceeds to undertake a best judgement assessment where it comes to form an opinion that the turnover of sales and purchases as disclosed by the dealer are not “worthy of credence”. It is upon the formation of this opinion that he proceeds to determine the turnover of sales or purchases to the best of his judgment. The issue which therefore falls for consideration is whether the facts and figures which were gathered and collected during the course of survey operations, were sufficient for the assessing authority to form an opinion or arrive at the conclusion that the books of account as maintained by the assessee were not worthy of credence. 7. Now, it is not disputed and in fact, the Tribunal so records, that all account books, records and material, were produced and placed before the survey team. The Tribunal, as noted above, had in fact, recorded that it was not the case of the respondents that either certain material which was demanded was not produced or that material or records were withheld. 8. The Tribunal, as noted above, had in fact, recorded that it was not the case of the respondents that either certain material which was demanded was not produced or that material or records were withheld. 8. That therefore leaves before the assessing authority the discrepancies in the recorded quantities of raw material and finished products and the fact that entries in the RG-1 Register did not match with what was actually found during the course of the survey operations. While dwelling upon the significance of these discrepancies, it was incumbent upon the assessing authority to come to a conclusion that the discrepancies themselves were sufficient to warrant the formation of an opinion that the books of accounts and records were not being faithfully maintained by the assessee. The other aspect which should have necessarily fallen for consideration of the assessing authority was whether the explanation so proffered by the assessee was reasonable and plausible or of a nature or character which was not worthy of consideration at all. In the facts of the present case, the Court finds that the difference in the recorded quantity of raw material and what was actually found by the survey team on the date of inspection was a minuscule 0.67 per cent. Similarly, insofar as the quantity of finished product which was found by the survey team as not matching with what was recorded in the RG-1 Register is concerned, the same was duly explained by the assessee who had submitted that the survey team had proceeded to add the quantity of finished product which was manufactured on the said date itself. The explanation so advanced on behalf of the assessee is not disputed by learned standing counsel in the course of his oral submissions nor did he refer the Court to any material which may have even remotely tended to indicate that the same was factually incorrect or unsustainable. This is liable to be viewed bearing in mind the fact that neither the assessing authority nor the Tribunal considered the same nor did they record any finding as to why the said explanation was not liable to be accepted. Were these two aspects which were highlighted by the assessee wholly unworthy of credence is something which then therefore must now be considered. Were these two aspects which were highlighted by the assessee wholly unworthy of credence is something which then therefore must now be considered. Both the explanations which were proffered by the assessee in the opinion of this Court were clearly circumstances which were reasonable and plausible. In the absence of any record or material which may have cast a shadow upon their veracity they were liable to be accepted. Applying the reasonable person test it clearly follows that the explanation advanced could not have been outrightly rejected or be termed as wholly implausible. This more so when the respondents did not rest their case against the assessee on any material which may have established that the explanation offered was not liable to be believed. 9. Section 28 of the Act empowers the assessing authority to reject the books of account of an assessee where it finds that the same are not worthy of credence. The provision when it empowers the assessing authority to reject the turnover of sales and purchases as declared casts a duty to come to a positive conclusion that the assessee is undertaking operations without all transactions being dutifully and faithfully recorded in the books of account. It is only when he comes to form an opinion that no credence at all can be laid upon the disclosures made by the assessee that the books of accounts are to be rejected. The word ‘credence’ has been defined in the Oxford English Dictionary (Second Edition) as follows: “.....3. The condition of being worthy; or of being held worthy, of confidence; trustworthiness; credit, repute 4. Something, usually a document (see b) which gives claim to credit or confidence; credentials......” 10. From the above, it is clear that the authority must come to a conclusion that the books of accounts as maintained and as a whole cannot be relied upon or held worthy of confidence. 11. It is trite to note that the rejection of books of account has serious consequences insofar as the assessee is concerned. It cannot be resorted to based upon a singular instance of insignificant character. It must be based upon the authority coming across a course of conduct evident of suppression and deliberate concealment. It surely cannot be a measure adopted in the face of a minuscule discrepancy which may be noted. It cannot be resorted to based upon a singular instance of insignificant character. It must be based upon the authority coming across a course of conduct evident of suppression and deliberate concealment. It surely cannot be a measure adopted in the face of a minuscule discrepancy which may be noted. This aspect gains significance in the backdrop of the present case where the difference itself was of only 0.67 per cent. This, in the opinion of the Court, did not form sufficient ground to come to a conclusion that the books maintained by the assessee were not worthy of credence or that the transactions were not faithfully or dutifully recorded in the account books. Pausing here, it becomes relevant to clarify that this Court does not intend to lay down as a broad proposition that a singular transaction cannot in all situations be sufficient to reject the books of account. There may be a case where the singular discrepancy may be of such vital import that it cannot be brushed aside or ignored. What would have to be necessarily be borne in mind is the significance of the infraction and whether the same is indicative or evidence of a deliberate attempt to suppress and conceal turnover. 12. Proceeding then to the issue of estimation of turnover the Court finds that although the Tribunal accepts the submission of the revisionist that all the thirty eight machines were not functioning in May 2008, it has proceeded to estimate the escaped turnover to be Rs. 1,40,00,000/-. On what basis this figure has been arrived at is neither noted nor elaborated upon by the Tribunal. While it is true that a best judgment assessment would necessarily entail a certain degree of guess work, the guess itself which is arrived at by the authority must be fair, informed, intelligent and referable to some valid or cogent basis for arriving at the figure of escaped turnover. It can neither be arbitrary, fanciful or based wholly on conjecture. For the purposes of arriving at the figure of escaped turnover to be Rs. 1,40,00,000/-, the Tribunal neither refers to the scale of operations in the succeeding months nor does it rest its estimation upon any material or contemporaneous record which may have been found in the course of the survey operations. For the purposes of arriving at the figure of escaped turnover to be Rs. 1,40,00,000/-, the Tribunal neither refers to the scale of operations in the succeeding months nor does it rest its estimation upon any material or contemporaneous record which may have been found in the course of the survey operations. On both scores, therefore, this Court is unable to sustain the orders passed by the assessing authority as well as the Tribunal. 13. Learned counsels for parties do not dispute that the assessment under the Entry Tax enactment is based solely upon the assessment undertaken under the Act. For the reasons recorded above, the same must also necessarily fall. 14. This revision shall consequently stand allowed. The orders dated 7 December 2009 passed by the assessing authority, the order dated 20 March 2010 passed by the first appellate authority as well as order of the Tribunal dated 30 July 2011, are hereby set aside. The questions referred stand answered in favor of the assessee and against the Revenue.