Incomplete tax return may trigger best judgment assessment, but prior hearing remains mandatory before provisional demand.

A monthly Central Sales Tax return filed without proof of payment of the admitted tax was treated as an incomplete return, because the rule required such proof as part of the return itself. On that basis, the assessing authority could invoke best judgment provisional assessment for incompleteness. However, the authority had to first give the dealer an opportunity to show the correctness and completeness of the return before determining turnover to the best of its judgment. As no prior opportunity was given, the demand notice was invalid and the provisional demand was quashed, leaving the authority free to proceed afresh in accordance with law after hearing the dealer.

---

---

Issues: (i) Whether a monthly return filed under the Central Sales Tax Rules without a treasury receipt or crossed cheque for the admitted tax is an incomplete return and can be subjected to best judgment provisional assessment. (ii) Whether an assessing authority can issue a demand for such tax without first giving the dealer an opportunity to show cause against the proposed best judgment assessment.

Issue (i): Whether a monthly return filed under the Central Sales Tax Rules without a treasury receipt or crossed cheque for the admitted tax is an incomplete return and can be subjected to best judgment provisional assessment.

Analysis: The monthly return under rule 14-A had to be accompanied not only by the prescribed declarations and certificates but also by proof of payment of the admitted tax. The return form and the scheme of the rule showed that such proof formed part of the return itself. A return filed without that accompaniment was not a complete return, even if the turnover disclosed was otherwise correct. Rule 14-A(4) authorized provisional best judgment assessment where the return was incomplete, and the absence of an express clause identical to the Andhra Pradesh General Sales Tax Rules did not curtail that power.

Conclusion: The return was incomplete, and the assessing authority was empowered to proceed to best judgment provisional assessment.

Issue (ii): Whether an assessing authority can issue a demand for such tax without first giving the dealer an opportunity to show cause against the proposed best judgment assessment.

Analysis: Rule 14-A(4) itself required the assessing authority to give the dealer an opportunity to prove the correctness and completeness of the return before determining the turnover to the best of his judgment. That requirement was not an empty formality but a condition precedent to the exercise of the power, and non-compliance also offended the principles of natural justice. As no such opportunity had been given before the impugned notice was issued, the provisional demand could not stand.

Conclusion: The demand notice was invalid for want of prior notice and opportunity.

Final Conclusion: The impugned demand was quashed, but the assessing authority was left free to proceed afresh in accordance with law after giving the dealer an opportunity of hearing.

Ratio Decidendi: Where a tax return is required to be accompanied by proof of payment of the admitted tax, failure to furnish that proof renders the return incomplete and exposes it to best judgment provisional assessment, but such assessment cannot be made without first giving the dealer an opportunity to show the correctness and completeness of the return.

---