Best judgment assessment requires fair disclosure of material, but no separate second notice on the proposed estimate in every case.

Best judgment assessment under section 18 of the M.P. General Sales Tax Act and rule 33 requires the assessing authority to make a fair estimate on the basis of material on record and surrounding circumstances. The assessee must be given an opportunity to meet the material relied on, including discrepancies, comparable cases, or information used against him, and should not be assessed on material collected behind his back. However, the law does not require a separate second notice on the proposed estimate in every case. Once the books are lawfully rejected and the relevant material is disclosed for explanation, a further opportunity to object to the estimate itself is not invariably mandatory.

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Issues: Whether, in a best judgment assessment, the assessing authority must always give the assessee a further opportunity to show cause against the proposed estimate after first issuing notice to explain why best judgment assessment should be made.

Analysis: The reference arose from the scheme of best judgment assessment under section 18 of the M.P. General Sales Tax Act and rule 33, which require the authority to make a fair and proper estimate on the basis of the material on record and surrounding circumstances. The governing principle is that the assessee must not be assessed on material collected behind his back and must be given an opportunity to explain any discrepancy, information, comparable case, or other material relied upon. However, the legal requirement is one of fair hearing and disclosure of the material relied on, not necessarily a two-stage procedure in every case. Once the books are rejected on permissible grounds and the relevant material is disclosed to the assessee for explanation, the authority is not bound in all cases to disclose a separate proposed estimate and invite a second round of objections.

Conclusion: A further opportunity to object to the proposed best judgment estimate is not invariably required; the assessee is entitled to a fair opportunity to explain the material relied upon, but not necessarily to a separate second notice on the estimate itself. The answer is against the assessee and in favour of the Revenue.

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