Best judgment assessments need supporting material, while parallel remedy time cannot be excluded for limitation.

Best judgment turnover estimates must be supported by material and cannot rest on conjecture; the turnover fixed at Rs. 2,00,000 for each assessment year was held unjustified because the assumed basis had become erroneous and no other supporting material remained. On limitation, time spent pursuing a section 30 application to set aside ex parte assessment orders could not be excluded under section 14(2) of the Limitation Act because that remedy was simultaneous, sought different relief, and was decided on merits. The delay in filing the appeals was also not condonable under section 5 because no sufficient cause was shown on the basis of mistaken legal advice.

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Issues: (i) whether the turnover fixed in best judgment assessment at Rs. 2,00,000 for each assessment year was justified; (ii) whether the time spent in pursuing an application to set aside ex parte assessment orders under section 30 of the U.P. Sales Tax Act could be excluded for computing limitation for the appeals, and whether the delay in filing those appeals could be condoned under section 5 of the Limitation Act.

Issue (i): Whether the turnover fixed in best judgment assessment at Rs. 2,00,000 for each assessment year was justified.

Analysis: Best judgment assessment may rest on estimation, but the estimate must still be supported by material and cannot be a mere guess. The basis adopted to sustain the estimate had become erroneous, because the earlier year's figure assumed by the revising authority was not correct and the connected assessment had itself been set aside and remanded. No other material remained to support the turnover fixed by the assessing authority.

Conclusion: The turnover estimate was not justified and the finding was in favour of the assessee.

Issue (ii): Whether the time spent in pursuing an application to set aside ex parte assessment orders under section 30 of the U.P. Sales Tax Act could be excluded for computing limitation for the appeals, and whether the delay in filing those appeals could be condoned under section 5 of the Limitation Act.

Analysis: The remedy by appeal and the remedy under section 30 were simultaneous and not consecutive. Section 14(2) of the Limitation Act could apply only where the earlier proceeding was for the same relief, the court was unable to entertain it, and the inability arose from defect of jurisdiction or a like cause. Those conditions were absent because the section 30 application sought different relief, was entertainable, and was decided on merits. The delay also could not be excused under section 5 because there was no sufficient cause based on mistaken legal advice.

Conclusion: The time spent in the section 30 proceedings could not be excluded, and the delay was not liable to be condoned; the finding was in favour of the department.

Final Conclusion: The reference succeeded only on the question of arbitrariness in the turnover estimate, while the objections based on limitation and condonation failed.

Ratio Decidendi: Time spent in a simultaneous, entertainable remedy that is decided on merits cannot be excluded under section 14(2) of the Limitation Act, and a best judgment assessment must still rest on some supporting material rather than conjecture.

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