Best judgment assessment requires prior notice and hearing; delay in assessment alone does not justify interest for the period.

Delayed assessment after timely filing of returns does not, by itself, vitiate assessment under the Tripura Sales Tax Act, 1976. However, where the dealer filed returns on time and the delay was not attributable to him, interest could not be imposed on the enhanced tax for the intervening period. Best judgment assessment requires prior notice of the adverse material proposed to be relied on and a reasonable opportunity to rebut it; reliance on market-rate material without such notice breaches fair procedure and invalidates the assessment. The assessment, appellate, revisional and demand orders were set aside, with liberty to make a fresh assessment in accordance with law.

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Issues: (i) whether delayed assessment after filing of returns in time could make the assessment vitiated or render the dealer liable to interest on the enhanced tax for the intervening period; (ii) whether a best judgment assessment could be sustained without prior notice indicating the materials proposed to be used against the dealer and without affording a reasonable opportunity of hearing.

Issue (i): delayed assessment after timely filing of returns did not, by itself, invalidate the assessment.

Analysis: On a construction of section 9(1) of the Tripura Sales Tax Act, 1976, assessment is to be made at the close of the year or on closure of business, but mere delay in completing the assessment was held not to be fatal. At the same time, where the dealer had furnished returns in time and the delay was not attributable to him, the enhanced demand for the intervening period could not be visited with interest against him.

Conclusion: The dealer was not liable to pay interest on the enhanced amount of tax for the period of delay not attributable to him.

Issue (ii): a best judgment assessment required prior notice of the materials or evidence proposed to be relied upon and an opportunity to controvert them.

Analysis: The assessing authority relied on the prevailing market rate of bricks while making the best judgment assessment, but no notice was issued to the dealer calling upon him to meet that material. The requirement of fair procedure in best judgment assessment demanded that the assessee be informed of the adverse material and be given an effective chance to respond.

Conclusion: The best judgment assessments were invalid for breach of the requirement of prior notice and reasonable opportunity of hearing.

Final Conclusion: The assessment, appellate, revisional and demand orders were set aside, with liberty to the assessing authority to make a fresh assessment after following the prescribed fair procedure.

Ratio Decidendi: In a best judgment assessment, the authority must disclose the material proposed to be used against the assessee and afford a reasonable opportunity to rebut it, and delay in assessment does not by itself vitiate the assessment though it may preclude levy of interest for the delayed period when the delay is not attributable to the dealer.

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