Best judgment assessment and remand-based reassessment principles applied to uphold sales tax reassessments

Fresh assessments made pursuant to a final remand order were held to fall within the four-year period in the second proviso to section 11(2a) of the Bengal Finance (Sales Tax) Act, 1941, so the reassessments were not time-barred. The earlier invalidity of the original assessments did not override the specific limitation period for reassessment after remand. The text also states that section 9(2) of the Central Sales Tax Act, 1956 carries into Central sales tax proceedings the assessment powers available under the State sales tax law, including best judgment assessment under section 11(1), and a best judgment assessment could therefore be framed.

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Issues: (i) Whether fresh assessments made after remand were barred by limitation under section 11(2a) of the Bengal Finance (Sales Tax) Act, 1941. (ii) Whether a best judgment assessment could be made under the Central Sales Tax Act, 1956.

Issue (i): The second proviso to section 11(2a) permits a fresh assessment pursuant to an order under section 20 or any order of a court to be made within four years from the date of such order. The remand order of the Financial Commissioner had attained finality and the reassessments were completed within four years of that order. The earlier invalidity of the original assessments did not displace the specific statutory time-limit applicable to fresh assessments after remand.

Conclusion: The fresh assessments were not barred by limitation.

Issue (ii): Section 9(2) of the Central Sales Tax Act, 1956 authorises the assessing authority, while assessing Central sales tax, to exercise the powers available under the general sales tax law of the State, and to apply the provisions of that law governing assessment procedure. Since the State law empowered best judgment assessment under section 11(1), that power was available in Central sales tax proceedings as well. A contrary view would permit evasion by withholding returns or books of account.

Conclusion: A best judgment assessment could be framed under the Central Sales Tax Act, 1956.

Final Conclusion: Both referred questions were answered in favour of the department, and the assessments were upheld.

Ratio Decidendi: Where the State sales tax law applies to Central sales tax assessments through section 9(2), the procedural powers available under the State law, including best judgment assessment, remain available; and a fresh assessment made pursuant to a final remand order is governed by the specific limitation period prescribed for such reassessment.

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