Best judgment assessment need not always increase turnover; fair estimation may rely on regular books if bona fide

Best judgment assessment under section 18(4) of the M.P. General Sales Tax Act is intended to reach a fair and proper estimate of taxable turnover, having regard to business extent, surrounding circumstances, and other relevant matters. The authority is not confined to enhancing turnover, and where regular books of account are maintained and not rejected, they may be used as the basis for a fair estimate. The assessment must be bona fide and non-arbitrary; enhancement is not an essential ingredient of the process.

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Issues: Whether best judgment assessment under section 18(4) of the M.P. General Sales Tax Act, 1958 necessarily requires enhancement of turnover in view of rule 33(3).

Analysis: Best judgment assessment is meant to reach a fair and proper estimate of taxable turnover. The rule directs the assessing authority to have regard to the extent of business carried on, surrounding circumstances, and other relevant matters. That exercise is not confined to increasing turnover, and where regular books of account are maintained and are not rejected, the books may form the basis of a fair estimate. The assessment must be bona fide and cannot be arbitrary; enhancement is not an essential ingredient of the process.

Conclusion: Best judgment assessment under section 18(4) does not necessarily mean enhancement of turnover, and the question was answered in favour of the assessee.

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