Best judgment sales tax assessment allows profit estimation on admitted purchases when accounts are not maintained.

Where a dealer's liability had already commenced and the material on record was sufficient, the appellate authority could decide the sales tax matter without remand, acting within its appellate powers under the sales tax law. In a best judgment assessment, where sales accounts were not maintained, turnover could be estimated by applying a reasonable profit margin to admitted purchases; the addition of 20 per cent as profit was treated as a permissible factual estimate on the circumstances. The Tribunal's approach on both liability and profit estimation was upheld, and the reference was answered against the dealer.

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Issues: (i) Whether the Tribunal was justified in determining the dealer's tax liability on the basis of the material on record instead of remanding the case. (ii) Whether the dealer was correctly assessed on the basis of his total purchases plus 20 per cent as profit.

Issue (i): Whether the Tribunal was justified in determining the dealer's tax liability on the basis of the material on record instead of remanding the case.

Analysis: The liability had already been found to have commenced from an earlier date, and the dealer had placed before the taxing authorities whatever material was in his possession, including figures relating to purchases for earlier years. In those circumstances, the Tribunal was entitled to decide the matter on the existing record and was not bound to remand the case. The power to do so was supported by the appellate powers under the relevant sales tax law.

Conclusion: The issue was answered in the affirmative and in favour of the Revenue.

Issue (ii): Whether the dealer was correctly assessed on the basis of his total purchases plus 20 per cent as profit.

Analysis: Where a dealer had not maintained sales accounts and assessment had to be made to the best of judgment, it was open to the taxing authority to estimate turnover by applying a reasonable profit margin to the admitted purchases. The addition of 20 per cent was treated as a permissible judicial estimate on the facts, and the challenge to it was rejected. The precise rate of profit depended on the circumstances and was treated as a factual matter.

Conclusion: The issue was answered in the affirmative and in favour of the Revenue.

Final Conclusion: The reference was answered against the dealer, and the Tribunal's approach to both liability and estimation of profit was upheld.

Ratio Decidendi: Where a dealer's liability has already been determined and the existing record is sufficient, the appellate authority may decide the matter without remand; in a best judgment assessment, a reasonable flat-rate profit may be applied to admitted purchases, and the choice of rate is ordinarily a question of fact.

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