Escaped-assessment notices and best-of-judgment assessments upheld; limitation, appeal bar, and recovery challenge all failed.

Escaped-assessment notices were upheld because separate notices and demand notices had in fact been issued for each assessment year, and the earliest year was covered within the statutory limitation period. The court also held that escaped-assessment proceedings follow the regular assessment machinery, so a best-of-judgment assessment could validly be made where the statutory contingencies existed; the absence of an appeal did not create legal infirmity. Allegations of illegal revenue recovery also failed because no coercive recovery step had yet been taken. The challenge to the assessment orders and related reliefs was therefore rejected.

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Issues: (i) Whether the escaped-assessment notices and demand notices were invalid for want of separate notices for each assessment year and whether the assessment for the earliest year was barred by limitation; (ii) whether the Assessing Officer was required to proceed only under the escaped-assessment provision and whether assessment under the best-of-judgment provision deprived the assessee of an appeal; (iii) whether the initiation of revenue recovery proceedings was illegal.

Issue (i): Whether the escaped-assessment notices and demand notices were invalid for want of separate notices for each assessment year and whether the assessment for the earliest year was barred by limitation.

Analysis: The record showed that separate notices were in fact issued for each financial year, notwithstanding the initial notice referring to the range of years. The file also showed separate demand notices for each year, duly served on the assessee. For the earliest year, the notice under the escaped-assessment provision was served within the statutory period of five years from the end of the relevant year, and the assessment order was made and served within time. The challenge based on delay and want of separate notices therefore failed on facts.

Conclusion: The notices and the earliest assessment were valid and within time.

Issue (ii): Whether the Assessing Officer was required to proceed only under the escaped-assessment provision and whether assessment under the best-of-judgment provision deprived the assessee of an appeal.

Analysis: The statutory scheme treated escaped-assessment proceedings as following the same procedural pattern as regular assessments under the return-and-enquiry provisions. After notice, the officer could assess on the basis of the return, on the basis of evidence, or make a best-of-judgment assessment where the statutory contingencies existed. The appellate bar attached to assessments made under the best-of-judgment provision, whether arising in ordinary assessment or in escaped-assessment proceedings. The contention that the assessment had to be described as one under the escaped-assessment provision in order to preserve an appeal was rejected.

Conclusion: The best-of-judgment assessments under section 18(4) were legally sustainable and the absence of an appeal was not a legal infirmity.

Issue (iii): Whether the initiation of revenue recovery proceedings was illegal.

Analysis: The court found that no recovery step had yet been taken by the authority complained of, and the only material suggested merely an attempt to persuade payment, which was not unlawful.

Conclusion: No illegality in revenue recovery was made out.

Final Conclusion: The challenge to the assessment orders and allied reliefs failed, and the original petition was rejected in full.

Ratio Decidendi: In escaped-assessment proceedings, the procedure after notice follows the assessment machinery applicable under the return-and-enquiry provisions, and a best-of-judgment assessment made in such proceedings remains governed by the statutory bar on appeal attaching to best-of-judgment assessments.

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