Best judgment assessment extends to reassessment of escaped turnover under the U.P. Sales Tax Act

Section 21 of the U.P. Sales Tax Act was interpreted to permit best judgment assessment in reassessment proceedings for escaped turnover. The explanation to the provision was read broadly, so the term "assessment" includes reassessment as well as the original assessment. On that construction, the assessing authority may resort to best judgment even when the initial assessment had accepted the disclosed turnover, because the main provision contemplates both assessment and reassessment of escaped turnover.

---

---

Issues: Whether, in proceedings for reassessment of escaped turnover under section 21 of the U.P. Sales Tax Act, the assessing authority can make a best judgment assessment even where the initial assessment had accepted the disclosed turnover.

Analysis: Section 21 provides for both assessment and reassessment where turnover has escaped assessment, and its explanation states that nothing in the sub-section prevents the assessing authority from making an assessment to the best of its judgment. The word "assessment" in the explanation was read in a wide and comprehensive sense so as to include reassessment as well as the first assessment. The use of "assess" and "reassess" in the main provision was treated as covering two contingencies, while the explanation was understood as authorising best judgment assessment in both. The same expression was also used elsewhere in section 21 in a comprehensive sense, supporting that interpretation.

Conclusion: Best judgment assessment is permissible in reassessment proceedings under section 21 of the U.P. Sales Tax Act, and the question was answered in the affirmative in favour of the Revenue.

Ratio Decidendi: The expression "assessment" in the explanation to the escaped assessment provision includes reassessment, so the assessing authority may resort to best judgment assessment even when reopening a completed assessment for escaped turnover.

---