Escaped assessment and best judgment reassessment upheld where unexplained electricity consumption undermined returned show figures.

Section 7-B of the Tamil Nadu Entertainments Tax Act, 1939 applied to tax payable under section 5-A through the incorporation effected by section 5-C(3), so the reassessment was within jurisdiction. On merits, inspection material and electricity consumption figures, when compared with the proprietor's lower returned number of shows and left unexplained, were sufficient to doubt the returns and justify escaped assessment. The court held that such material supported best judgment reassessment, and the challenge to the assessment failed.

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Issues: (i) Whether section 7-B of the Tamil Nadu Entertainments Tax Act, 1939 could be invoked to reassess entertainments tax payable under section 5-A by reason of section 5-C(3) of the Act. (ii) Whether the material based on electricity consumption was sufficient to justify a finding of escaped assessment and a best judgment reassessment.

Issue (i): Whether section 7-B of the Tamil Nadu Entertainments Tax Act, 1939 could be invoked to reassess entertainments tax payable under section 5-A by reason of section 5-C(3) of the Act.

Analysis: Section 7-B expressly speaks of escaped assessment in cases covered by sections 4 and 4-A, but section 5-C(3) extends the provisions of the Act, except the excluded sections, to tax payable under section 5-A or 5-B as they apply to tax payable under section 4-A. The provision therefore operates by incorporation and brings section 7-B into the regime of section 5-A. The fact that section 4-A refers to section 4 does not dilute the express mandate contained in section 5-C(3).

Conclusion: Yes. Section 7-B was applicable to tax payable under section 5-A through section 5-C(3), and the reassessment was not without jurisdiction.

Issue (ii): Whether the material based on electricity consumption was sufficient to justify a finding of escaped assessment and a best judgment reassessment.

Analysis: The department relied on an inspection-based statistical study and actual electricity consumption figures to estimate the number of shows conducted. The proprietor returned a substantially lower number of shows, and no credible explanation was offered for the high consumption. In such a case, unexplained electricity usage constituted sufficient material to doubt the correctness of the returns and to sustain a best judgment reassessment. The precedents relied upon, dealing with rejection of accounts on electricity consumption alone or with isolated instances of duplicate tickets, were distinguishable on facts.

Conclusion: Yes. The material was sufficient to support a finding of escaped assessment and to uphold the reassessment on best judgment.

Final Conclusion: The reassessment was valid both on jurisdiction and on merits, and the challenge to the tax assessment failed.

Ratio Decidendi: Where the statute by incorporation applies the general reassessment machinery to a special tax regime, and the assessee's return is rendered doubtful by reliable material showing unexplained consumption inconsistent with the returned figures, best judgment reassessment for escaped assessment is permissible.

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