Best judgment assessment requires reliable material; arbitrary electricity-consumption norms and alternative-remedy objections were rejected.

A best judgment assessment based on a flat electricity-consumption norm was held unsustainable because it was not supported by examination of the assessee's accounts, test checks, comparable data, or any other reliable material. The Court reiterated that such estimations require objective material giving rise to a legitimate doubt about the return's correctness, and an arbitrary consumption assumption is contrary to settled law. The writ petitions were not rejected on the basis of alternative remedy, because the assessment orders were plainly contrary to binding precedent and grossly erroneous. The assessments and revised assessments were quashed, and fresh orders were permitted to be passed in accordance with law.

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Issues: (i) Whether the best judgment assessments could be sustained when they were founded on a flat rate of electricity consumption without examination of the account books or other reliable material; (ii) whether the writ petitions were liable to be rejected on the ground of availability of an alternative statutory remedy.

Issue (i): Whether the best judgment assessments could be sustained when they were founded on a flat rate of electricity consumption without examination of the account books or other reliable material.

Analysis: The impugned assessments proceeded on a generalized assumption of electricity consumption per unit of production and not on scrutiny of the assessees' books of account. The governing principle applied by the Court was that a best judgment assessment must rest on material giving rise to a legitimate doubt about the correctness or completeness of the return, and the estimate must be supported by reliable basis rather than an arbitrary norm. In the absence of objective examination of the accounts, actual test check, or comparable data establishing the adopted rate, the assessment was held to be contrary to the settled law governing such estimations.

Conclusion: The best judgment assessments and revised assessments were unsustainable and were set aside in favour of the assessees.

Issue (ii): Whether the writ petitions were liable to be rejected on the ground of availability of an alternative statutory remedy.

Analysis: The Court held that the impugned proceedings were directly contrary to binding precedent and were grossly erroneous. In such circumstances, relegating the assessees to an alternate statutory remedy was not considered just or equitable. The availability of another remedy did not preclude interference where the assessment orders themselves were unsustainable in law.

Conclusion: The objection based on alternative remedy was rejected and the writ petitions were entertained.

Final Conclusion: The assessments were quashed, fresh assessment orders were permitted to be passed in accordance with law, and the writ petitions were allowed.

Ratio Decidendi: A best judgment assessment cannot be founded on an arbitrary consumption norm unless the assessing authority first has material to doubt the return and supports the estimate with reliable, objective basis; a writ court may interfere despite alternate remedy where the assessment is plainly contrary to binding law.

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