Best judgment assessment requires prior notice and hearing; assessments were set aside for non-compliance with statutory procedure.

Best judgment assessments could not be sustained because the statutory procedure required prior notice and an effective opportunity of hearing before the power was exercised under section 17(6) and rule 25. The record did not show service of notice in the prescribed form or any real opportunity for the assessee to appear and present its case. The assessment orders were therefore vitiated in law and set aside, with liberty to complete the assessments in accordance with law.

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Issues: Whether the best judgment assessments were liable to be set aside for want of prior notice and opportunity of hearing under section 17(6) and rule 25.

Analysis: The assessments were made as best judgment assessments. The statutory scheme required that before resorting to such power, the affected assessee be afforded an opportunity to appear and present the case in the manner contemplated by the rules. The record did not show that any notice in the prescribed form, or any effective opportunity of hearing, had been given before completion of the assessments. In the absence of such compliance, the exercise of power under section 17(6) could not be sustained.

Conclusion: The impugned assessment orders were vitiated in law and were set aside, with liberty to the authority to complete the assessments in accordance with law.

Ratio Decidendi: A best judgment assessment cannot be sustained unless the assessee is given the statutory opportunity of hearing required before the power is exercised.

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