Best judgment and escaped-assessment powers operate independently under sales tax law, depending on non-filing or escaped turnover.

Under the U.P. Sales Tax Act, the majority treated section 7(3) best judgment assessment and section 21(1) escaped-assessment proceedings as independent remedies. Where a dealer failed to file returns, section 7(3) could be used for a final assessment even after the assessment year closed; where turnover was believed to have escaped assessment, section 21(1) applied. The Court held that the provisions were not compulsorily cumulative and that the applicable machinery depended on whether the case involved mere non-filing of a return or escaped turnover. The majority also rejected the constitutional objection to the limitation structure. The dissent considered section 21 to be the exclusive provision once turnover had escaped assessment.

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Issues: Whether, in cases where a dealer fails to file returns and no assessment proceedings are commenced by the end of the relevant period, assessment can be made under section 7(3) of the U.P. Sales Tax Act, under section 21(1) of that Act, or under both provisions.

Analysis: The majority held that the scheme of the Act treats quarterly returns and provisional assessments as part of a yearly system of assessment, but once the time for filing the final return expires and no assessment proceedings have commenced, the turnover is to be treated as having escaped assessment. On that view, section 21(1) is attracted where the assessing authority has reason to believe that turnover has escaped assessment, while section 7(3) is available where the dealer has failed to file a return but the circumstances do not justify resort to section 21(1). The two provisions were held to be independent and not compulsorily cumulative. The majority further held that a final assessment under section 7(3) can be made even after the close of the assessment year, and that the limitation structure did not render the provision unconstitutional in the manner suggested.

Conclusion: The powers under section 7(3) and section 21(1) are distinct and may be invoked according to the facts of the case; assessment in the no-return cases before the Court was upheld or rejected accordingly, and the writ petition failed.

Concurring / Majority view: The assessment machinery under the Act permits independent resort to section 7(3) or section 21(1) depending on whether the case is one of ordinary best judgment assessment or escaped assessment.

Dissenting Opinion: Gulati, J. took the view that once turnover escapes assessment, section 21 is the only provision applicable and section 7(3) does not operate simultaneously.

Final Conclusion: The references were answered in accordance with the majority view and the writ petition was dismissed.

Ratio Decidendi: Where the statutory scheme provides both a best judgment assessment provision and an escaped-assessment provision, the two operate independently and the applicable provision depends on whether the facts disclose mere non-filing of a return or escaped turnover requiring action under the escaped-assessment machinery.

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