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Issues: Whether, in reassessment under section 19(1) of the Madhya Pradesh General Sales Tax Act, 1958, the assessing authority was confined only to the exact escaped turnover actually proved, or could determine the escaped turnover by best judgment assessment on the basis of concealed transactions found during a part of the year.
Analysis: The question was held to be covered by the Supreme Court's ruling that, where the assessee's accounts are unreliable and concealed dealings are discovered during a particular period, the assessing authority may make a bona fide estimate of the escaped turnover for the whole year by applying a relevant and rational basis, including an appropriate multiple. The estimate need not be proved with mathematical precision, and the court will interfere only if the basis is arbitrary or lacks a reasonable nexus with the facts discovered. Reassessment under section 19(1) was treated as a fresh assessment in which best judgment principles can apply.
Conclusion: The Tribunal was not justified in holding that reassessment must be confined only to the established escaped turnover and that best judgment assessment could not be made. The answer was against the assessee and in favour of the Revenue.
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