Best judgment assessment barred after accepted returns; escaped turnover cannot be taxed without express statutory authority.

A taxing authority cannot reopen accepted weekly returns and invoke best judgment assessment merely because seized records suggest suppression; once the returns were accepted and tax was levied and collected on that basis, the foundation for treating them as incorrect or incomplete disappeared. The entertainments tax statute, as then in force, also contained no express power to assess escaped turnover or escaped income, unlike other fiscal enactments that specifically provided for escaped assessment. In the absence of such statutory authority, further demand could not be sustained, and the assessment and demand were quashed.

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Issues: (i) Whether, after the returns had been accepted and tax had been levied and collected, the authorities could reopen the matter and make a best judgment assessment under the entertainments tax law; (ii) Whether the statute contained any power to assess escaped turnover or escaped income in the circumstances of the case.

Issue (i): Whether, after the returns had been accepted and tax had been levied and collected, the authorities could reopen the matter and make a best judgment assessment under the entertainments tax law.

Analysis: The statutory scheme contemplated best judgment assessment only where the prescribed authority was satisfied that the return was incorrect or incomplete, or where no return had been filed. Once the department had accepted the weekly returns, levied tax on that basis, and collected it, it could not later treat those very returns as incorrect or incomplete merely because records seized on inspection suggested suppression. The earlier acceptance of the returns negatived the foundation for invoking best judgment assessment.

Conclusion: The authorities could not resort to best judgment assessment after accepting the returns and collecting tax thereon.

Issue (ii): Whether the statute contained any power to assess escaped turnover or escaped income in the circumstances of the case.

Analysis: The judgment contrasted the entertainments tax law with other fiscal enactments that expressly provided for escaped assessment, such as the sales tax and income-tax statutes. It held that the entertainments tax enactment, as it then stood, contained no provision authorising reassessment of escaped income or escaped turnover. In the absence of such a statutory power, the taxing authorities had no jurisdiction to demand further tax on that basis.

Conclusion: The statute did not authorise assessment of escaped turnover or escaped income in the circumstances of the case.

Final Conclusion: The assessment and demand were quashed, and the petitioner succeeded without costs.

Ratio Decidendi: A taxing authority cannot invoke best judgment assessment after accepting returns and levying tax on them, and it cannot assess escaped turnover or income unless the statute expressly confers that power.

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