Fresh reassessment must consider books of account and all relevant materials, not witness statements alone

After an assessment is set aside in full and the matter is remanded for cross-examination of third-party witnesses, the assessing authority must conduct a fresh and comprehensive reassessment. It cannot rely only on witness statements in isolation and must also verify and consider the dealer's books of account as part of the material necessary for arriving at the correct taxable assessment. The principle applied is that best judgment assessment must be based on all relevant materials taken together, not by ignoring accounts produced by the dealer. The refusal to examine the books of account before making the fresh assessment was therefore unsustainable.

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Issues: Whether, after setting aside the revised assessment and remanding the matter for cross-examination of third-party witnesses, the assessing authority was also required to verify and consider the petitioner's books of account before making a fresh assessment.

Analysis: The remand order had set aside the earlier assessment in entirety, even though the immediate grievance before the Tribunal concerned denial of cross-examination. Once the assessment stood reopened, the authority was required to undertake a fresh and comprehensive exercise. An assessment could not be made only on the basis of witness statements in isolation, because the books of account were a necessary part of the material for arriving at the correct taxable assessment. The court also relied on the settled principle that best judgment assessment must be made after considering the relevant materials as a whole and not by ignoring the accounts produced by the dealer.

Conclusion: The assessing authority was bound to verify the books of account and then make a fresh assessment after considering all relevant materials; the refusal to do so was unsustainable.

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