Best judgment tax assessment must be based on fair material, not a fixed presumption of full load throughout the period.

A best judgment assessment of passenger and goods tax under the Mysore Motor Vehicles (Taxation on Passengers and Goods) Act, 1961 must rest on a fair and honest estimate supported by material collected by the Tax Officer. The power cannot be exercised on an inflexible presumption that a public carrier always carried its full complement of goods, nor on the mere fact of non-appearance by the operator. The proviso to Section 6 fixes only the upper limit of liability and does not require assessment on the footing of full load throughout the relevant period. The assessment was therefore legally unsustainable and was set aside.

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Issues: Whether a best judgment determination of passenger and goods tax could be sustained where the Tax Officer proceeded on an inflexible assumption that the public carrier had carried its full complement of goods, without collecting material for a fair estimate.

Analysis: Under the Mysore Motor Vehicles (Taxation on Passengers and Goods) Act, 1961, an operator of a public carrier vehicle was required to furnish returns and, on default, the Tax Officer could determine tax to the best of his judgment after giving a reasonable opportunity. A best judgment determination, however, was not a punitive exercise and could not rest on a fixed presumption or on the mere fact of non-appearance. It had to be based on some material gathered by the Tax Officer so that an honest and fair estimate of the proper tax could be made. The proviso to Section 6 only fixed the upper limit of liability and did not create a mandatory basis for assessment on the footing of full load throughout the relevant period.

Conclusion: The best judgment determination was legally unsustainable and was set aside.

Final Conclusion: The tax assessment and the appellate order failed because the statutory power of best judgment was exercised on a mistaken legal basis rather than on a fair estimation supported by material.

Ratio Decidendi: A best judgment assessment must be a fair and honest estimate based on relevant material and cannot be made on an inflexible or punitive presumption that the maximum taxable situation existed throughout the period.

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