Best-judgment assessment requires recorded jurisdictional facts before section 25 can be invoked against filed returns.

A best-judgment assessment under section 25 of the Tamil Nadu Value Added Tax Act, 2006 can be made only when the statutory preconditions are recorded, namely absence of a return or a return that is incomplete or incorrect. Where the impugned orders merely noted turnover reported in monthly returns and did not record any such jurisdictional fact, section 25 could not be invoked. In that situation, assessment had to proceed on the basis of the filed returns under the statutory scheme governing scrutiny and reassessment. The Madras HC therefore held the assessments unsustainable under section 25 and quashed them, leaving the authority free to proceed afresh in accordance with law.

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Issues: Whether the assessment orders could be sustained under section 25 of the Tamil Nadu Value Added Tax Act, 2006 when the orders did not record the statutory preconditions for invoking that provision, and whether the respondent was instead required to proceed under section 22 on the basis of the returns filed.

Analysis: Section 25(1) can be invoked only if no return is filed within the prescribed period or if the return appears incomplete or incorrect. The impugned orders merely stated that the dealer had reported turnover in the monthly returns, but did not record any finding that there was no return, or that the return was incomplete or incorrect. In the absence of such stated preconditions, the power under section 25 could not be exercised. Where returns are filed, section 22 contemplates assessment on the basis of those returns, subject to the statutory scheme for scrutiny and reassessment.

Conclusion: The assessment orders were not sustainable under section 25 and were liable to be set aside. The writ petitions succeeded in favour of the assessee.

Final Conclusion: The impugned assessments were quashed and the matter was left open for the assessing authority to proceed afresh in accordance with law.

Ratio Decidendi: The power to make a best-judgment assessment under section 25 arises only upon the existence and recording of the statutory contingencies for its exercise; absent such jurisdictional facts, the assessment cannot be sustained.

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