Best judgment assessment requires genuine enquiry; turnover cannot be estimated arbitrarily from unaccounted way bills alone.

Under Section 14(1) of the Andhra Pradesh General Sales Tax Act, unaccounted way bills can justify an inference of further suppressed turnover, so the authority was not confined to the exact value of those bills. However, best judgment assessment must rest on a genuine enquiry into all relevant factors, including past returns, business records and surrounding circumstances. A flat addition made solely because of three unaccounted way bills, without such enquiry, was held arbitrary and unsustainable. The assessment and the affirming appellate order were quashed, and the matter was remitted for fresh disposal in accordance with law.

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Issues: (i) Whether, on finding unaccounted way bills, the assessing authority could estimate suppressed turnover beyond the value represented by those bills. (ii) Whether the best judgment assessment was valid when no proper enquiry was made into all relevant factors before estimating turnover.

Issue (i): Whether, on finding unaccounted way bills, the assessing authority could estimate suppressed turnover beyond the value represented by those bills.

Analysis: Under Section 14(1) of the Andhra Pradesh General Sales Tax Act, where the return is incorrect or incomplete, the authority may make enquiry and determine turnover to the best of its judgment. On the basis of unaccounted way bills, the authority was entitled to infer that not only the turnover directly represented by those bills but also other similar turnover may have escaped assessment. The authority therefore had jurisdiction to make an addition beyond the value of the seized way bills.

Conclusion: The authority was not confined only to the exact value of the unaccounted way bills, and it could estimate further suppressed turnover.

Issue (ii): Whether the best judgment assessment was valid when no proper enquiry was made into all relevant factors before estimating turnover.

Analysis: The power under Section 14(1) is not arbitrary. It requires a genuine enquiry and consideration of relevant factors before arriving at a best judgment estimate. The assessment was made by adding fifty per cent of the returned turnover solely because of three unaccounted way bills, without examining the dealer's past returns, business records, control order returns, or other relevant circumstances. Such an enquiry could not be treated as a meaningful exercise of statutory power, and a uniform estimate throughout the year was held unreasonable on the facts.

Conclusion: The assessment was arbitrary and unsustainable, and the appellate order affirming it also failed.

Final Conclusion: The assessment and the appellate order were quashed, and the matter was remitted for fresh disposal in accordance with law.

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