1992 (7) TMI 328 - HC - VAT and Sales Tax

Assessment upheld in Tax Case: Notices valid, best judgment assessment supported by evidence

The High Court of Patna ruled in Tax Case No. 145 of 1979 that notices were validly served on the assessees despite their denial, and the best judgment ... - Issues:Service of notice on the assessee, Nexus of estimate of turnover with materials on record.Analysis:The judgment by the High Court of Patna involved a reference and Tax Case No. 145 of 1979, addressing common questions referred by the Commercial Taxes Tribunal, Bihar, Patna. The questions of law referred to the Court were related to the service of notice on the assessee and the proper nexus of the estimate of turnover with the materials on record. The case stemmed from a written complaint received by the Deputy Commissioner, Commercial Taxes, Patna, alleging that certain individuals were conducting business without proper registration under the Bihar Sales Tax Act, 1959. The assessing officer initiated proceedings under the Act against the individuals, including sending notices for document production, which were refused by the assessees. Subsequently, best judgment assessments were made based on various enquiry reports. The total turnover and tax assessments for the assessees were detailed in the judgment.Regarding the first issue of service of notice, the Tribunal found that notices were duly served upon the assessees, despite their attempts to avoid service. The assessees denied receiving the notices, but the Tribunal rejected their stand and concluded that notices were properly served based on various modes of delivery. The assessees' argument that the postal peon's report did not specify who refused to accept the notices was dismissed, as the endorsements indicated refusal by the assessees. The Court upheld the Tribunal's finding on the service of notices, considering it a factual determination without errors.On the second issue of the estimate of turnover nexus with materials on record, the assessing officer based the best judgment assessment on information collected from three different reports and enquiries conducted by officers. The Tribunal and the assessing officer had sufficient materials to support the assessment, indicating that the best judgment assessment was not made without any material on record. The Court agreed with the Tribunal's decision on this issue as well, finding no error in the assessment process.In conclusion, the Court answered the first question on service of notice in the negative and the second question on the estimate of turnover nexus in the affirmative, ruling in favor of the Revenue and against the assessees. The judgment was communicated to the Commercial Taxes Tribunal, Bihar, Patna, with agreement from both judges involved in the case.