Best judgment assessment for non-filing of returns can coexist with escaped-turnover notice provisions under the tax statute.
Unassessed turnover was held to be assessable within the statutory scheme where notice in Form 13 was issued within the prescribed limitation period, so the assessments were not time-barred. Omission to issue notice under section 15 did not invalidate the assessments because section 14(5) separately authorised best judgment assessment where returns were not furnished by the prescribed date, after reasonable opportunity of hearing. The Court held that failure to file returns could fall within both provisions, since section 15 governed escaped turnover and section 14(5) covered non-filing, and the two provisions overlapped rather than excluded each other. The assessments were therefore valid.
Issues: (i) Whether the assessments were barred by limitation; (ii) whether omission to issue notice under section 15 vitiated the assessments; (iii) whether assessment under section 14(5) was legally permissible; and (iv) whether failure to furnish returns brought the case within section 15 alone or also within section 14(5).
Issue (i): Whether the assessments were barred by limitation.
Analysis: The notice in Form 13 was issued within the period prescribed for initiating proceedings in respect of unassessed turnover. The statutory scheme required the notice to be issued within the relevant limitation period, while the assessment itself could follow thereafter.
Conclusion: The assessments were not barred by limitation.
Issue (ii): Whether omission to issue notice under section 15 vitiated the assessments.
Analysis: Section 15 applied to escaped turnover and required notice under that provision before reassessment or assessment under that route. However, the Court held that turnover which had not been assessed could also be brought within section 14(5), and where the authority proceeded under section 14(5) by issuing the appropriate notice within time, the absence of a section 15 notice did not invalidate the assessment.
Conclusion: The absence of a notice under section 15 did not vitiate the assessments.
Issue (iii): Whether assessment under section 14(5) was legally permissible.
Analysis: Section 14(5) specifically covered cases where returns were not furnished by the prescribed date and authorised best judgment assessment after a reasonable opportunity of being heard. The Court rejected the contention that all unassessed turnover could be dealt with only under section 15, since that would render section 14(5) otiose.
Conclusion: Assessment under section 14(5) was legally permissible.
Issue (iv): Whether failure to furnish returns brought the case within section 15 alone or also within section 14(5).
Analysis: The Court held that a case of failure to furnish returns may fall within both provisions. Section 15 governed escaped turnover and the time for issuing notice, while section 14(5) separately authorised best judgment assessment for non-filing of returns. The provisions were held to overlap, not exclude each other.
Conclusion: The case fell within both section 15 and section 14(5), and the assessments were validly made.
Final Conclusion: The statutory scheme was construed to permit best judgment assessment for non-filing of returns notwithstanding the parallel applicability of the escaped-assessment provision, and the references were answered against the assessee.