Best judgment assessment permits no further notice after default where the assessee fails to file or substantiate a return.

Where an assessee fails to file a return under the U.P. Sales Tax Act, or does not establish the correctness or completeness of a return after a reasonable opportunity, the assessing authority may proceed to a best judgment assessment under section 7(3) without issuing a further separate notice. The statutory notice is confined to giving the assessee an opportunity to prove the return's accuracy; once that opportunity is given and not used, no additional notice is required before finalising assessment. The absence of another notice in that situation does not amount to a breach of natural justice, because the assessee's own default brings the matter to the best judgment stage.

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Issues: Whether a best judgment assessment under section 7(3) of the U.P. Sales Tax Act could be made without issuing a separate notice to an assessee who had not filed a return.

Analysis: Under section 7(1), the assessee was bound to submit a return within the prescribed time. Section 7(3) empowered the assessing authority, where the return was not filed or was found incomplete or incorrect, to make a best judgment assessment after such enquiry as it considered necessary and after giving a reasonable opportunity to prove the correctness or completeness of the return. The statutory scheme showed that the notice contemplated by the Act was only for enabling the assessee to establish the correctness or completeness of the return. Once that opportunity had been given and not availed of, the assessee dropped out of the assessment process and no further notice was required before completing the best judgment assessment. The absence of a further notice did not amount to breach of natural justice because the assessee's own default had already led to the best judgment stage.

Conclusion: The question was answered in the affirmative, and the assessment without a separate notice was held to be legally valid.

Ratio Decidendi: Where the assessee fails to file a return, or fails to prove the correctness or completeness of the return after being given a reasonable opportunity, the assessing authority may make a best judgment assessment under section 7(3) without issuing any further notice.

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