Best judgment assessment permits fair estimate using prior material, and refusal to adjourn need not raise a question of law.

Refusal to adjourn the sales tax hearing was treated as a factual matter, not a referable question of law, and no interference was warranted on that ground. In best judgment assessment, the taxing authority could rely on prior returns, earlier assessments, local knowledge, and surrounding circumstances to make an honest and fair estimate. The absence of a prescribed method did not make the estimate arbitrary, and some guesswork was permissible so long as it was not dishonest, vindictive, or capricious. The turnover and deduction estimates were therefore upheld, and the reference was answered against the assessee.

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Issues: (i) Whether the rejection of the assessee's prayer for adjournment was justified; (ii) whether the estimate of turnover and deductions in making the best judgment assessments was arbitrary and without basis.

Issue (i): Whether the rejection of the assessee's prayer for adjournment was justified.

Analysis: The question related to the propriety of the Sales Tax Officer's refusal to adjourn the hearing and did not involve any question of law arising from the reference. The matter was treated as one of fact and not as a legal issue requiring interference in reference jurisdiction.

Conclusion: The rejection of the prayer for adjournment was held to be justified.

Issue (ii): Whether the estimate of turnover and deductions in making the best judgment assessments was arbitrary and without basis.

Analysis: Under section 11(4) of the Central Provinces and Berar Sales Tax Act, 1947, no particular method of estimation was prescribed for a best judgment assessment. The taxing authority was entitled to use local knowledge, previous returns, prior assessments, and other relevant material to make an honest estimate. Such assessment necessarily involved some guesswork, but it had to be a fair and honest guesswork and not dishonest, vindictive, or capricious. The use of earlier best judgment figures as part of the material for later assessments did not make the later estimates unreal or arbitrary.

Conclusion: The estimate of turnover and deductions for the two years was held not to be arbitrary and not without basis.

Final Conclusion: Both questions were answered against the assessee, and the reference was disposed of in favour of the revenue.

Ratio Decidendi: In a best judgment assessment, the authority may rely on previous returns, prior assessments, local knowledge, and surrounding circumstances to make an honest and fair estimate, and the assessment is not invalid merely because it involves some guesswork or because no specific method of enquiry is prescribed.

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