Reasoned best judgment assessment requires hearing and application of mind before demand notice under entry tax law.

An assessment under section 7(4) of the Orissa Entry Tax Act, 1999 must be made only after the dealer is given a reasonable opportunity to prove the correctness and completeness of the return, and the assessing authority must record reasons while making a best judgment assessment. A printed-form order issued without proper application of mind, and in a manner inconsistent with the statutory scheme, reflects non-application of mind and breach of natural justice. On that basis, the assessment order and the consequential demand notice were quashed, while fresh proceedings in accordance with law were left open.

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Issues: Whether the assessment order and consequential demand notice under the Orissa Entry Tax Act, 1999 were sustainable when the order was passed in a printed form without proper application of mind and without complying with the requirement of reasonable opportunity under section 7(4).

Analysis: Section 7(4) of the Orissa Entry Tax Act, 1999 requires the assessing authority, where a return is absent or appears incorrect or incomplete, to make a best judgment assessment and to record reasons, after giving the dealer a reasonable opportunity of proving the correctness and completeness of the return. The impugned assessment and demand were found to be inconsistent on their face and based on an ad hoc manner of notice and assessment. The record also showed that the notice and subsequent action were treated in a manner not in consonance with the statutory scheme. The printed-form assessment was held to reflect non-application of mind and breach of natural justice.

Conclusion: The assessment order and the consequential demand notice were quashed. The authority was left free to initiate fresh assessment proceedings in accordance with law.

Ratio Decidendi: An assessment under section 7(4) of the Orissa Entry Tax Act, 1999 must be made after giving reasonable opportunity and by a reasoned application of mind; failure to comply with these requirements vitiates the assessment and any consequential demand.

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