Escaped turnover assessment under sales tax law is confined to omitted turnover and may be estimated by best judgment.

Section 10 of the M.B. Sales Tax Act, 1950 confines escaped-assessment proceedings to turnover that has actually escaped earlier assessment and does not permit reopening of the entire original assessment. The assessing authority may, however, make a best judgment estimate of the escaped turnover where the dealer does not appear or produce account books after notice. In such circumstances, the authority is not required to prove each individual item of escaped turnover or give item-wise rebuttal notice before proceeding on estimation.

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Issues: (i) Whether proceedings under Section 10 of the M.B. Sales Tax Act, 1950 permit reopening of the whole assessment or are confined to the turnover that has escaped assessment; (ii) whether a best judgment assessment can be made in proceedings under Section 10; (iii) whether the assessing authority must specify each item of escaped turnover and afford rebuttal opportunity in such proceedings.

Issue (i): Whether proceedings under Section 10 of the M.B. Sales Tax Act, 1950 permit reopening of the whole assessment or are confined to the turnover that has escaped assessment.

Analysis: The language of Section 10 empowers the assessing authority to assess only the tax payable on the turnover which has escaped assessment. The provision does not authorise revision or reopening of the entire original assessment. The escaped assessment must therefore be confined to the turnover actually found to have escaped earlier assessment.

Conclusion: The assessment under Section 10 cannot reopen the whole assessment and is confined to the escaped turnover.

Issue (ii): Whether a best judgment assessment can be made in proceedings under Section 10.

Analysis: Section 10 contemplates notice to the dealer and inquiry, and nothing in it excludes assessment to the best of judgment. Where the dealer fails to appear or produce account books after notice, the authority may estimate the escaped turnover on the basis of the material before it. The earlier assessment can be retained only to the extent not covered by the escaped turnover proceedings.

Conclusion: The best judgment assessment made in the present case is according to law.

Issue (iii): Whether the assessing authority must specify each item of escaped turnover and afford rebuttal opportunity in such proceedings.

Analysis: The authority is not required to prove every individual item of escaped turnover before making an estimate where the dealer does not produce accounts. If the dealer appears and produces accounts, an opportunity to rebut may arise; but where the dealer fails to appear and fails to produce the account books, the assessment may proceed on estimation without item-wise notice or rebuttal evidence.

Conclusion: It was not necessary to prove every specific item of escaped turnover, and no rebuttal opportunity question arose because the dealer did not appear or produce his account books.

Final Conclusion: The reference was answered by upholding the authority to assess only the escaped turnover and to make a best judgment assessment on the facts, while rejecting the contention that item-wise notice and rebuttal were mandatory.

Ratio Decidendi: A provision authorising assessment of escaped turnover permits only reassessment of the turnover that has escaped, and where the dealer fails to produce accounts after notice, the authority may determine such escaped turnover on best judgment without item-wise proof or rebuttal notice.

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