Belated return must be considered before best judgment assessment; ignoring it invalidates the assessment and related penalty.

A belated return filed before the assessment order cannot be ignored as non est merely because it was late. Under section 12(2) of the Madras General Sales Tax Act, best judgment assessment is available only where no return is filed in time or where the return is found incorrect or incomplete, and the assessing officer must consider an existing late return and follow the statutory procedure if its correctness is in doubt. A best judgment assessment made by disregarding the return was therefore invalid, and the consequential penalty could not stand; both were quashed, with liberty to proceed afresh in accordance with law.

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Issues: Whether a return filed after the prescribed time but before the assessment order is made can be ignored and whether best judgment assessment can be made without considering such belated return.

Analysis: Section 12(2) of the Madras General Sales Tax Act, 1959 authorises best judgment assessment where no return is filed within time or where the return is found to be incorrect or incomplete. That power does not extend to treating a return filed before the assessment order as non est merely because it was late. The assessing officer must consider the belated return, and if it appears incomplete or incorrect, follow the statutory procedure and give the assessee an opportunity to establish its correctness. The concept of best judgment assessment does not permit the officer to disregard an existing return and proceed on imagination divorced from the facts disclosed by it. Since the penalty depended upon the assessment, it could not survive if the assessment itself was unsustainable.

Conclusion: The belated return had to be considered in the assessment proceedings, and the best judgment assessment made by ignoring it was invalid. The assessment and the consequential penalty were quashed, with liberty to the assessing officer to proceed afresh in accordance with law and with due regard to the return filed.

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