Best judgment turnover assessment must rest on relevant material and honest estimation, not unsupported suspicion.

A challenge to an assessment was held maintainable despite the death of one registered dealer and the non-joinder of persons said to be interested in the business, because the proceedings related to the business assessment and the preliminary objections did not bar review of legality. The article also states that a best judgment assessment of turnover must rest on relevant material and a fair, honest estimate, with due regard to prior returns and other material; an unexplained estimate based on mere suspicion does not meet that standard. On that basis, the assessment and consequential proceedings were set aside and remitted for fresh assessment in accordance with law.

---

---

Issues: (i) Whether the challenge to the assessment was maintainable despite the death of one registered dealer and the non-joinder of certain persons said to be interested in the business; (ii) Whether the best judgment assessment of turnover was valid when the assessing authority made no stated basis or reasons for the estimate.

Issue (i): Whether the challenge to the assessment was maintainable despite the death of one registered dealer and the non-joinder of certain persons said to be interested in the business.

Analysis: The registration stood in the names of the partners, and the proceedings were directed against the assessment made on the business. The death of one partner did not by itself invalidate the challenge under Article 226 of the Constitution of India, and the absence of the deceased partner's heirs or the Receiver did not defeat the petition. The preliminary objections therefore did not affect the Court's jurisdiction to examine the legality of the assessment.

Conclusion: The preliminary objections were rejected and the petition was held maintainable.

Issue (ii): Whether the best judgment assessment of turnover was valid when the assessing authority made no stated basis or reasons for the estimate.

Analysis: A best judgment assessment must still rest on relevant material and on a fair estimate of the proper turnover. Though some guesswork is permissible, it must be honest guesswork and not mere suspicion. The assessing authority was required to consider the assessee's previous returns and other relevant materials, but the impugned order disclosed no reason or basis for fixing the gross turnover at Rs. 34,00,000. The assessment therefore failed to satisfy the minimum legal standard governing ex parte best judgment assessment.

Conclusion: The best judgment assessment was invalid and was quashed.

Final Conclusion: The assessment order and the consequential certificate proceeding were set aside, and the matter was sent back for a fresh assessment in accordance with law.

Ratio Decidendi: A best judgment assessment is lawful only if it is founded on relevant material and a fair, honest estimate of turnover, with due regard to the assessee's circumstances and prior returns; an unsupported estimate based on mere suspicion cannot stand.

---