Best judgment assessment and presumptive taxation: suppressed turnover can push a dealer out of the scheme and bar input tax credit.

Detection of suppression of purchases justified rejection of the books and resort to best judgment assessment; the addition for probable omissions was treated as a valid exercise of assessing power and not arbitrary or without jurisdiction. Once the turnover determined on that basis crossed the statutory limit, the dealer could no longer remain under the presumptive taxation scheme under Section 6(5) of the Kerala Value Added Tax Act, 2003 and became liable under the regular provisions. A dealer opting for presumptive taxation cannot simultaneously claim input tax credit, and wilful suppression further disentitled the claim.

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Issues: (i) whether the best judgment assessment based on detected suppression and probable omissions could be interfered with; (ii) whether the assessee could continue as a presumptive dealer under Section 6(5) of the Kerala Value Added Tax Act, 2003 and claim input tax credit.

Issue (i): whether the best judgment assessment based on detected suppression and probable omissions could be interfered with.

Analysis: Detection of suppression of purchases and related offences justified rejection of the books of account and resort to best judgment assessment. The addition of both the actual suppression and further additions for probable omissions and suppressions was treated as a legitimate exercise of assessing power, and there was no basis to term it arbitrary, perverse, or beyond jurisdiction. The conduct of the dealer itself exposed the assessment to best judgment.

Conclusion: The best judgment assessment was upheld against the assessee.

Issue (ii): whether the assessee could continue as a presumptive dealer under Section 6(5) of the Kerala Value Added Tax Act, 2003 and claim input tax credit.

Analysis: Once the assessed turnover, including the additions made on best judgment, crossed the statutory limit for presumptive taxation, the dealer went of Section 6(5) and became liable under Section 6(1). A dealer opting for presumptive taxation cannot simultaneously claim input tax credit, and the claim for such credit was inconsistent with the claim to remain under the presumptive scheme. The detection of wilful suppression further disentitled the assessee from input tax credit.

Conclusion: The assessee was not entitled to remain under Section 6(5) or to claim input tax credit.

Final Conclusion: The revisions failed because the turnover determined on best judgment took the assessee beyond the presumptive limit and the statutory scheme did not permit the claimed tax credit alongside presumptive taxation.

Ratio Decidendi: Turnover determined by valid best judgment assessment, including additions for probable suppression, must be taken into account for the statutory threshold under presumptive taxation, and a dealer under the presumptive scheme cannot claim input tax credit inconsistent with that scheme.

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