Escaped turnover reassessment can use best judgment under the Bihar Sales Tax Act when accounts are unreliable.

Under the Bihar Sales Tax Act, 1959, escaped-assessment proceedings under section 18(1) may be initiated where seized books provide reasonable grounds to believe turnover escaped assessment, and an appellate remand does not bar a fresh reassessment on that basis. The provision also incorporates, so far as may be, the regular assessment machinery, so section 16(3) permits best judgment assessment in reassessment proceedings where the accounts are incorrect, incomplete, or unreliable. On that construction, reassessment of escaped turnover on a best judgment basis was upheld and the reference was answered in favour of the revenue.

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Issues: (i) Whether, after the appellate remand order, the assessing authority could lawfully make a fresh assessment under section 18(1) of the Bihar Sales Tax Act, 1959, instead of confining itself to the book figures. (ii) Whether section 18(1) of the Bihar Sales Tax Act, 1959, permitted assessment of escaped turnover on the best of judgment basis by applying section 16(3) of the Act.

Issue (i): Whether, after the appellate remand order, the assessing authority could lawfully make a fresh assessment under section 18(1) of the Bihar Sales Tax Act, 1959, instead of confining itself to the book figures.

Analysis: The seized books disclosed material giving rise to reasonable grounds to believe that turnover had escaped assessment for the relevant year. The earlier appellate order did not create an absolute bar against resort to the escaped-assessment machinery under section 18(1). Once the prescribed authority was satisfied about escapement, a fresh assessment could proceed notwithstanding the remand directions.

Conclusion: The reassessment under section 18(1) was valid, and this issue was decided against the assessee.

Issue (ii): Whether section 18(1) of the Bihar Sales Tax Act, 1959, permitted assessment of escaped turnover on the best of judgment basis by applying section 16(3) of the Act.

Analysis: Section 18(1) authorises reassessment of turnover believed to have escaped assessment and directs that the provisions of the Act apply, so far as may be, as though notice under section 18(1) were notice under section 16(2). On that construction, section 16(3), which empowers best judgment assessment where accounts are incorrect, incomplete, or unreliable, is attracted to reassessment proceedings under section 18(1). The result is that the escaped turnover could be assessed on a best of judgment basis.

Conclusion: Section 18(1) includes power to assess escaped turnover to the best of judgment, and this issue was decided against the assessee.

Final Conclusion: The reference was answered in favour of the revenue, and the legality of the reassessment proceedings was upheld.

Ratio Decidendi: Where the escaped-assessment provision incorporates, so far as may be, the procedural machinery of the regular assessment provisions, the assessing authority may apply best judgment assessment under the general assessment provision while reassessing escaped turnover.

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