Best judgment assessment after rejection of accounts may use electricity data, but central sales tax needs material evidence of sales.

Where books of account are validly rejected on justifiable factual material, electricity consumption may be used as a relevant factor in best judgment estimation of taxable turnover, and the provincial assessment was upheld. However, a Central Sales Tax assessment cannot be sustained without any material showing central sales, even if the books have been rejected; the absence of independent evidence made the central sales turnover and consequential tax liability unsustainable. The revision therefore succeeded only in relation to central sales tax liability, while the provincial assessment remained intact.

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Issues: (i) Whether rejection of the books of account and estimation of taxable turnover on the basis of defects in bills and electricity consumption was justified. (ii) Whether best judgment assessment of central sales turnover and consequential tax liability could be sustained in the absence of material showing central sales.

Issue (i): Whether rejection of the books of account and estimation of taxable turnover on the basis of defects in bills and electricity consumption was justified.

Analysis: The books of account were rejected on the basis of comparative discrepancies in bill sizes and that finding was one of fact. Once the books stood rejected on justifiable material, electricity consumption could legitimately be taken as one of the relevant factors in a best judgment assessment. Excessive consumption by itself may not justify rejection of accounts, but after rejection of the books it can support estimation of turnover.

Conclusion: The assessment of provincial taxable turnover on the basis of rejected accounts and electricity consumption was upheld.

Issue (ii): Whether best judgment assessment of central sales turnover and consequential tax liability could be sustained in the absence of material showing central sales.

Analysis: The assessment orders proceeded only on the premise that the books had been rejected, although a finding had been returned that no central sales were shown. No independent material was pointed out to justify any central sales turnover, and the appellate authority and tribunal affirmed the assessment without addressing that deficiency. In the absence of material showing central sales, best judgment assessment under the Central Sales Tax could not be sustained.

Conclusion: The central sales turnover and consequential tax liability were held unsustainable.

Final Conclusion: The revision was succeeded only to the extent of central sales tax liability, while the provincial assessment was maintained.

Ratio Decidendi: Once books of account are validly rejected, electricity consumption may be used as a relevant circumstance in best judgment assessment, but a sales tax assessment cannot be sustained in respect of a turnover for which there is no material at all.

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