Best judgment assessment requires proof of classification, relevant material, and a real hearing before tax is imposed.

In best judgment assessment, the taxing authority must still rely on relevant material and make an honest, reasonable estimate; it cannot classify goods mechanically or without showing that they fall within the chosen taxable entry. Where the department seeks to tax goods under a specific schedule entry, the burden remains on it to prove the classification, and failure to meaningfully consider the assessee's written submissions and supporting particulars makes the assessment unsustainable. A real and effective opportunity of hearing is also required; inadequate time, refusal of adjournment, and non-consideration of the reply amount to breach of natural justice, rendering the assessment liable to be set aside.

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Issues: (i) Whether the impugned best judgment assessment could be sustained when the assessing authority did not properly consider the assessee's material and did not discharge the burden of showing that the disputed goods fell within the taxable entry. (ii) Whether the assessment was vitiated for want of a meaningful opportunity to meet the case made out in the notice and for non-compliance with the requirements of fair hearing.

Issue (i): Whether the impugned best judgment assessment could be sustained when the assessing authority did not properly consider the assessee's material and did not discharge the burden of showing that the disputed goods fell within the taxable entry.

Analysis: In a best judgment assessment, the authority must still act on relevant material and make an honest and reasonable estimate; the power does not authorise a capricious or mechanical determination. Where the Department seeks to tax goods under a particular entry, the burden lies on it to show that the goods answer that description. The impugned order did not disclose any proper basis for classifying the bulk of the imported items as chemicals under the relevant schedule entry, nor did it show that the assessee's written submission and supporting particulars were meaningfully evaluated.

Conclusion: The assessment was unsustainable on merits because the burden of proving classification was not discharged and the determination was not shown to rest on proper material.

Issue (ii): Whether the assessment was vitiated for want of a meaningful opportunity to meet the case made out in the notice and for non-compliance with the requirements of fair hearing.

Analysis: The notice-and-hearing process must afford a real opportunity to present the case, not merely a formal appearance. The short time granted, coupled with the rejection of the request for more time and the non-consideration of the written submission, showed that the assessee was not given a fair and effective opportunity before the adverse determination was made.

Conclusion: The assessment was vitiated for breach of natural justice.

Final Conclusion: The impugned assessment could not be sustained and was set aside, with liberty to complete the assessment afresh in accordance with law.

Ratio Decidendi: Even in best judgment assessment, the taxing authority must base classification on relevant material and must afford a real and effective opportunity of hearing; failure to do so renders the assessment unsustainable.

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