Best judgment assessment upheld where admitted purchases and unexplained disposal supported an inference of suppressed sales.

Repeated notices, time for objections and adjournments satisfied the statutory requirement of reasonable opportunity under the Andhra Pradesh General Sales Tax Act, 1957, so the assessee could not claim denial of natural justice. On the merits, admitted outside-State purchases of photographic goods, use of C forms for goods not covered by registration, and no convincing explanation of disposal justified an inference of suppressed sales. The best judgment estimate was upheld because it rested on admitted facts and surrounding circumstances, with a rational nexus to the material on record and not on pure guesswork.

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Issues: (i) Whether the assessee was denied reasonable opportunity before the assessing authority and the appellate authority; (ii) whether the best judgment assessment of suppressed turnover from the admitted purchases of photographic goods was arbitrary or unsupported by material.

Issue (i): Whether the assessee was denied reasonable opportunity before the assessing authority and the appellate authority.

Analysis: The statutory requirement under section 14(4) of the Andhra Pradesh General Sales Tax Act, 1957 was that the dealer should be given notice and an enquiry should be made as considered necessary. The record showed repeated notices, time granted for objections, and further adjournments, but the assessee did not file objections within the time allowed or avail the opportunities granted. The later plea that no further hearing was given was inconsistent with the conduct of the assessee and with the facts found by the authorities.

Conclusion: The assessee was not denied reasonable opportunity.

Issue (ii): Whether the best judgment assessment of suppressed turnover from the admitted purchases of photographic goods was arbitrary or unsupported by material.

Analysis: The assessee admitted purchases of photographic goods from outside the State, had used C forms though the goods were not covered by her registration, and produced no convincing material to explain how the goods were disposed of. In such circumstances, the burden lay on the assessee to explain the disposal of the goods. The authorities were entitled to infer that the goods had been sold and to estimate the suppressed turnover on a rational basis. The estimate was not a pure guess, but was founded on admitted purchases and surrounding circumstances. The principles governing best judgment assessments required a rational nexus to available material, not proof of the exact suppressed turnover.

Conclusion: The assessment of suppressed turnover was not arbitrary and did not call for interference.

Final Conclusion: The revision failed because no violation of natural justice was shown and the inference of suppressed sales from the admitted purchases and misuse of C forms was sustainable on the material on record.

Ratio Decidendi: In a best judgment assessment, once the dealer admits undisclosed purchases and fails to explain their disposal, the burden may rest on the dealer to rebut an inference of suppressed sales, and an estimate based on such admitted facts and surrounding circumstances is valid if it has a rational nexus to the material available.

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