IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.3647 of 2008 M/S LAXMI BHANDAR, MUZAFFARPUR Versus THE STATE OF BIHAR & ORS ----------- For the Petitioner:- Mr L.N. Rastogi, Sr. Advocate. For the Respondents:- Mr Lalit Kishore, AAG-3 and Mr S. Bharti, JC to AAG-3. ***** 4. 12.05.2008. This writ petition depicts a very interesting picture. On a raid having been conducted at the premises of a person, who was dealing in various items which attract value added tax, it transpired that he was not paying any value added tax to the Government or to the Value Added Tax Department of the Government. Inasmuch as the transactions made by this person was colossal, on the raid having been conducted, the matter was thoroughly investigated. In course of such investigation it transpired that the person concerned in his Books of Accounts has purported to show that he was merely an agent in between two dealers, i.e. the purchaser and the seller. He indicated in his Books of Accounts that he was receiving instructions from his principals to effect purchases and the purchases so made were paid off by his principals by Bank drafts. One of the principals so disclosed by him in his Books of Accounts - 2 - is the petitioner. The Books of Accounts maintained by the person concerned depicts by which Bank draft the payments of the purchases alleged to have been made by him on account of the petitioner had been made. Believing that such entries are true and correct, an assessment has been made holding the petitioner liable for payment of value added tax as applicable in relation to the volumn of transactions, the person had shown in his Books of Accounts to have been routed through him by the petitioner. While doing so, unfortunately no effort was made to trace out those Bank drafts and to ascertain whether those Bank drafts were, in fact, issued by the Bankers at the instance of the petitioner. In terms of the provisions contained in Section 34 of the Indian Evidence Act, no one can be charged merely on the basis of entries made in Books of Accounts of a person. Books of Accounts kept and maintained in the usual course of business are accepted as corroborating evidence of the transactions reflected in such Books of Accounts. That being the position and inasmuch as the learned Additional Advocate General-3 has informed us that the Tax - 3 - Department of the State is now trying to gather all back-up materials including those pertaining to the transactions routed through the Bank which ultimately permitted purchase of the subject goods, it would be appropriate to set aside the order of assessment made principally on the basis of the entries made in the Books of Accounts of a third party and remit back the matter to the appropriate assessing officer and, accordingly, the writ petition is disposed of with the above direction. dk ( Barin Ghosh, J. ) ( Chandra Mohan Prasad, J. )