Best judgment turnover and entry tax levy must rest on material and proper merits-based examination before assessment stands.

Rejection of books of account and enhancement of turnover on best judgment basis must rest on reliable material and a reasonable foundation; the Tribunal had to consider the assessee's explanation on stock discrepancies and the past accepted turnovers, and its failure to do so made the sustained rejection and enhanced turnover unsustainable. The levy of entry tax on cement and saria also required merits-based examination because the assessee specifically challenged the abolition of entry tax on cement from 19.02.2010 and the applicable notification fixing entry tax on saria at 1%, but those objections were not addressed by the lower authorities. The revisional court therefore set aside the common order and remanded both appeals for fresh decision after hearing both sides.

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Issues: (i) whether rejection of the assessee's books of account and enhancement of turnover on best judgment basis was justified; (ii) whether the levy of entry tax on cement and saria was sustainable when the assessee raised a specific challenge to the assessment and the applicable notification.

Issue (i): Rejection of books of account can be sustained only when the material on record shows a reliable basis for discarding the declared accounts, and any best judgment assessment must rest on a reasonable foundation. The survey material, the assessee's explanation regarding stock discrepancies, and the past accepted turnovers had to be considered together. The Tribunal failed to deal with the assessee's explanation and also did not examine whether the turnover fixed by the assessing authority was reasonable.

Conclusion: The finding sustaining rejection of books and the enhanced turnover could not stand.

Issue (ii): The assessment under the Entry Tax Act was assailed on the ground that entry tax on cement had been abolished from 19.02.2010 and that the applicable Government notification prescribed entry tax on saria at 1%. These objections went to the legality of the levy itself and required consideration on merits, but the appellate authorities and the Tribunal did not examine them.

Conclusion: The levy of entry tax on cement and saria was not properly adjudicated and required fresh examination.

Final Conclusion: The revisional court set aside the Tribunal's common order and remanded both appeals to the Tribunal for fresh decision in accordance with law after affording due hearing to both sides.

Ratio Decidendi: Even after rejection of books of account, a best judgment turnover must be reasonable and supported by relevant material, and material objections affecting the legality of tax levy must be addressed by the fact-finding authority before the assessment can be upheld.

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