Best judgment assessment must rely on disclosed material and fair rebuttal, not arbitrary or unexplained estimation.

A best judgment assessment under the Sales Tax Act must rest on disclosed material, a rational basis, and a fair opportunity for the assessee to rebut adverse information. The High Court noted that the contracts and Inspector's report relied on were not shown to the assessee, the basis for the turnover estimate was unclear, and the figures appeared to be founded on suspicion rather than recorded reasons or proved material. The assessment was therefore invalid and set aside, leaving the authorities free to make a fresh assessment in accordance with law.

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Issues: Whether the best judgment assessment under the Sales Tax Act was vitiated because the material relied upon was not disclosed to the assessee and the assessment was made arbitrarily without proper basis.

Analysis: The assessment was made under the best judgment power corresponding to the income-tax provisions dealing with assessments on defective or unreliable accounts. While such power permits reliance on private information and surrounding circumstances, the material used against the assessee must be disclosed and the assessee must be given an opportunity to rebut it. Here, the orders did not show that the contracts and Inspector's report relied upon were disclosed to the assessee, nor was it clear which contracts formed the basis of the turnover estimate. The assessment figures were also not supported by recorded reasons and appeared to rest on suspicion rather than proved material.

Conclusion: The assessment was invalid and liable to be quashed for breach of fundamental principles governing best judgment assessment.

Final Conclusion: The petition succeeded, the impugned assessment was set aside, and the authorities were left free to make a fresh assessment in accordance with law.

Ratio Decidendi: A best judgment assessment must be based on disclosed material, afford a fair opportunity to rebut adverse information, and cannot rest on arbitrary or unexplained estimation.

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