Mandatory notice before best judgment assessment was required, and failure to serve it vitiated the sales tax assessment.

A best judgment sales tax assessment could not be made unless the dealer was first served with the statutory notice stating the reasons for non-acceptance of the disclosed turnover and given a reasonable opportunity to reply. The notice requirement under Rule 41(7), proviso (2), was treated as mandatory, and non-issuance of that notice before fixing the annual turnover rendered the assessment unsustainable. The assessment order was set aside and the matter remitted for fresh assessment after compliance with the notice requirement, in favour of the assessee.

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Issues: Whether the assessing authority could make a best judgment assessment without serving the statutory notice stating reasons for non-acceptance of the disclosed turnover, and whether non-issuance of such notice vitiated the assessment.

Analysis: Rule 41(7), proviso (2) required the Sales Tax Officer, before determining turnover to the best of his judgment, to serve notice on the dealer stating the reasons for non-acceptance of the disclosed turnover and to afford a reasonable opportunity of reply. The requirement was held to be mandatory. As no such notice had been issued before fixing the annual turnover, the best judgment assessment was found unsustainable.

Conclusion: The assessment order could not be maintained and the matter was remitted for fresh assessment after compliance with the mandatory notice requirement, in favour of the assessee.

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