Independent assessment in best judgment taxation cannot rest solely on intelligence findings or a prior penalty order.

Best judgment assessments under the Kerala General Sales Tax Act and the Central Sales Tax Act must be made by the assessing authority as an independent quasi-judicial exercise. Intelligence wing findings and a prior penalty order under section 45A may be used as material, but they cannot be the sole basis for assessment. Where the authority merely adopts the penalty findings, treats silence on objections as confirmation, and does not independently verify the available materials, the assessment reflects endorsement rather than adjudication and violates natural justice. The assessment orders were therefore unsustainable and required fresh consideration by the assessing authority.

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Issues: Whether the best judgment assessments under the Kerala General Sales Tax Act, 1963 and the Central Sales Tax Act, 1956 could be sustained when the assessing authority merely adopted the findings recorded by the intelligence officer under section 45A of the Kerala General Sales Tax Act, 1963 without making an independent assessment.

Analysis: The assessing authority functions as a quasi-judicial authority and, even in best judgment proceedings, must independently apply its mind to the materials available and make its own verification before arriving at a conclusion. Information gathered by the intelligence wing may be used as evidence, but it cannot be the sole basis for assessment. The order impugned showed that the assessing authority had merely incorporated the conclusions reached in the penalty proceedings under section 45A of the Kerala General Sales Tax Act, 1963 and had treated the absence of objections as sufficient to confirm the proposal. Such an approach amounted to endorsement of the penalty order rather than an independent assessment exercise. Since the assessment process must conform to natural justice and cannot rest only on a prior penalty finding, the orders were unsustainable.

Conclusion: The assessment orders could not be sustained and the matter was required to be remitted for fresh consideration by the assessing authority.

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