Best judgment assessment sustained where search materials and cancelled dealer registrations showed unexplained suppressed turnover.

Search materials recovered from the assessee's business and residential premises, including account books and slips, contained particulars of dealers whose registration certificates had already been cancelled. As the assessee gave no satisfactory explanation for those materials and merely denied them, and the related cancellations were undisputed, the record supported suppression of transactions not reflected in the books. On that basis, the revisional authority was justified in restoring the best judgment assessment and penalty under Section 12(3) of the Tamil Nadu General Sales Tax Act. The challenge to the revised assessment therefore failed.

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Issues: Whether the revision restoring the best judgment assessment and penalty under Section 12(3) of the Tamil Nadu General Sales Tax Act was justified on the basis of materials recovered in search and the cancellation of the concerned dealers' registration certificates.

Analysis: Materials including account books and slips were recovered from the assessee's business and residential premises. Those materials contained particulars of dealers whose registration certificates had already been cancelled. The assessee did not offer any satisfactory explanation for the presence of those materials, but merely denied them. The cancellation of the other dealers' registration certificates had not been challenged, and the record supported the view that the transactions were not reflected in the books. In these circumstances, the revisional authority was justified in treating the assessment as involving suppressed and clandestine transactions and in restoring the assessment made by the assessing officer.

Conclusion: The revision restoring the assessment and penalty was valid and the challenge by the assessee failed.

Ratio Decidendi: Where search materials recovered from the assessee's premises, coupled with undisputed cancellation of related dealers' registration certificates, remain unexplained, a best judgment assessment based on suppressed turnover is sustainable.

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