Best judgment assessment requires objective material and a reasonable nexus; unsupported turnover estimates cannot stand.

A best judgment assessment under section 43 of the Odisha Value Added Tax Act, 2004 must rest on relevant material and a reasonable nexus with the facts; it cannot be based on conjecture, caprice, or mere suspicion. The assessing authority had fixed turnover on an assumed daily average sale without any supporting document, statement, or report, so the estimate lacked an objective foundation. The Orissa High Court held that, in the absence of evidence showing how the turnover was determined, the assessment failed the legal standard and was liable to be quashed.

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Issues: Whether the best judgment assessment made under section 43 of the Odisha Value Added Tax Act, 2004 was sustainable in law when no material, evidence, or objective basis supported the estimate of turnover and the resulting tax and penalty.

Analysis: The assessment was founded on an assumed daily average sale without any supporting document, statement, or report to justify the figure adopted by the assessing authority. A best judgment assessment is not a matter of arbitrary caprice; although some guesswork is permissible, it must rest on material having a reasonable nexus with the circumstances of the case and must be more than suspicion. In the absence of any evidence showing how the turnover was fixed, the estimate failed to satisfy the legal standard governing such assessments.

Conclusion: The assessment order was illegal and liable to be quashed.

Ratio Decidendi: A best judgment assessment must be based on relevant material and a reasonable nexus to the facts and cannot rest on conjecture, caprice, or mere suspicion.

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