Best judgment assessment fails when missing returns or manufacturing accounts are not statutorily required and books remain assessable.

Best judgment assessment could not be sustained merely because returns were not submitted or a day-to-day manufacturing account was not maintained. Under the unamended section 26 of the Madhya Pradesh General Sales Tax Act, 1958 and rule 52, the assessee was required only to maintain accounts, not the later, more elaborate records introduced by amendment. In the absence of a statutory requirement for the specific records demanded by the assessing authority, and without a finding that the accounting method was unreliable for proper assessment, rejection of the books was unwarranted. The Tribunal's view that best judgment assessment was uncalled for was upheld in favour of the assessee.

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Issues: Whether the Tribunal was justified in holding that best judgment assessment was not warranted merely because two returns were not submitted and day-to-day manufacturing account was not maintained.

Analysis: For the relevant assessment period, the unamended section 26 of the Madhya Pradesh General Sales Tax Act, 1958 and rule 52 of the Madhya Pradesh General Sales Tax Rules only required maintenance of accounts and did not prescribe the more elaborate account-keeping obligations introduced later by amendment. In the absence of any statutory requirement to maintain the particular accounts referred to by the assessing authority, and in the absence of a finding that the assessee's method of accounting was such that assessment could not properly be made on that basis, non-submission of returns or non-maintenance of a manufacturing account by itself did not justify rejection of the books.

Conclusion: The Tribunal's view that best judgment assessment was uncalled for was upheld, and the question was answered in the affirmative in favour of the assessee.

Ratio Decidendi: Best judgment assessment cannot be sustained merely on non-submission of returns or non-maintenance of accounts unless the statute requires such records and the assessing authority records a finding that the assessee's accounting method is unreliable for proper assessment.

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