Best judgment assessment requires defective returns or suppression; a mere turnover decline cannot justify rejection of accounts.

Best judgment assessment under section 11(1) of the Bengal Finance (Sales Tax) Act, 1941, applied through rule 32 of the Delhi Sales Tax Rules, 1951, requires a finding that the returns are incorrect or incomplete before books of account can be rejected. Mere fall in turnover compared with the previous year is not enough without positive material showing suppression of sales or another cogent defect in the accounts. Where the dealer produced material explaining the decline in business and showing similar downturns in the trade, rejection of accounts and the resulting enhancement were not justified, and the addition made by the tax authorities was set aside.

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Issues: Whether the enhancement made on a best judgment basis by rejecting the dealer's books of account and returns was justified.

Analysis: Best judgment assessment under section 11(1) of the Bengal Finance (Sales Tax) Act, 1941, as applied through rule 32 of the Delhi Sales Tax Rules, 1951, could be invoked only where the returns were found to be incorrect or incomplete. The record disclosed no categorical finding of defect in the returns, no positive material of suppression of sales, and no cogent basis for rejecting the accounts merely because the turnover had fallen compared with the previous year. The dealer had also produced material indicating a general decline in the trade, reduced export quota, and similar fall in turnover of other dealers in the same line of business.

Conclusion: The rejection of accounts and the consequential enhancement were not justified, and the addition made by the assessing and appellate authorities was set aside in favour of the assessee.

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