Best judgment assessment must rest on material and reasons; arbitrary turnover enhancement cannot survive writ scrutiny

Failure to file the audit report under the Tamil Nadu VAT Act may attract the statutory penalty, and the assessing authority may still invoke best judgment powers, but any enhancement of declared turnover must be supported by enquiry, material and reasons. An assessment that increases turnover by 50% without a rational basis or due application of mind is arbitrary and unsustainable. The availability of an alternative remedy is ordinarily discretionary rather than an absolute bar to writ jurisdiction, especially where the assessment is shockingly arbitrary. The pre-existing penalty for the default cannot justify an additional unsupported turnover enhancement.

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Issues: Whether the best judgment assessment enhancing the declared turnover by 50% solely for failure to file the audit report under Section 63A of the Tamil Nadu Value Added Tax Act, 2006 was legally sustainable, and whether interference in writ jurisdiction was warranted despite the availability of an alternative remedy.

Analysis: Failure to file the audit report attracted the statutory penalty under Section 63A, and the authority was not precluded from invoking best judgment powers under Section 22(4). However, the impugned assessment disclosed no enquiry, material, or reasons to justify a 50% enhancement of turnover. The assessment thus lacked a rational basis and did not reflect due application of mind. The existence of an alternative remedy is ordinarily a rule of discretion and not an absolute bar to writ jurisdiction, particularly where the assessment is shockingly arbitrary. The penalty already levied for the statutory default could not justify an additional arbitrary enhancement of turnover.

Conclusion: The arbitrary enhancement was unsustainable, and interference under Article 226 was justified. The assessment order was liable to be set aside.

Ratio Decidendi: A best judgment assessment must be supported by relevant material and reasons, and an assessment made arbitrarily without rational basis may be struck down in writ jurisdiction notwithstanding the availability of an alternative remedy.

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