Best judgment assessment requires estimation or guesswork; full acceptance of returned turnover does not support penalty.

An assessment based on acceptance of the returned turnover in full, without any variation, estimation, or finding that the return was incomplete or false, is not a best judgment assessment. Best judgment assessment requires some element of estimation or guesswork by the assessing authority. Because that statutory foundation was absent, the penalty provisions linked to best judgment assessments under section 14(3) read with section 14(8) of the A.P. General Sales Tax Act were not attracted, and the penalty was unsustainable.

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Issues: Whether an assessment made by accepting the returned turnover without variation can be treated as a best judgment assessment so as to sustain penalty under section 14(3) read with section 14(8) of the A.P. General Sales Tax Act.

Analysis: A best judgment assessment contemplates some element of estimation or guesswork by the assessing authority, ordinarily where the return is incomplete, false, or otherwise unacceptable. Where the return is accepted in full, without any finding of incompleteness or falsity and without any estimation of turnover, the assessment is not one based on best judgment. In such circumstances, the statutory basis for levying penalty under the provisions governing best judgment assessments is not attracted.

Conclusion: The assessment in question was not a best judgment assessment and the penalty levied under section 14(3) read with section 14(8) was unsustainable.

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