Best judgment turnover estimates must rest on material, not guesswork, and supported enhancements may stand.

A best judgment assessment under the Bihar Sales Tax Act must rest on material and not on mere suspicion or arbitrariness. Where the books of account are rejected, the assessing authority may estimate turnover, and an ad hoc increase is sustainable if supported by evidence such as duplicate accounts and suppressed consignments. On the facts noted, the turnover enhancement was justified, although two railway consignments were found not to have been received and the precise proportionate adjustment was left to the assessing authorities.

---

---

Issues: Whether the ad hoc increase of 30% in gross turnover made in a best judgment assessment was justified and legal in the circumstances.

Analysis: The assessment had been made under section 16(3) of the Bihar Sales Tax Act, 1959 after the books of account were rejected. The accepted legal position was that, in a best judgment assessment, the assessing authority is not bound by strict rules of evidence, but the estimate must rest on some material and cannot be a mere guess or arbitrary figure. The record showed sufficient material to reject the books and to support an enhancement of turnover, including findings of duplicate accounts and suppressed consignments. At the same time, the authorities had found that two of the railway consignments were not in fact received by the dealer, yet the effect of that finding on the quantum of enhancement was not separately worked out.

Conclusion: The enhancement of gross turnover was justified on the materials available, and the questions were answered substantially in favour of the Revenue.

Final Conclusion: The reference was answered by sustaining the turnover increase, while leaving the exact extent of any proportionate adjustment to the assessing authorities.

Ratio Decidendi: A best judgment assessment must be founded on material and not on mere suspicion or arbitrariness, and questions of the quantum of estimate are for the taxing authorities where some evidentiary basis exists.

---