1979 (3) TMI 193

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....fy best judgment assessment under section 18(4)(d) of the M.P. General Sales Tax Act, 1958?" 2.. The material facts giving rise to this reference briefly are as follows: The assessee is a dealer carrying on business of manufacturing and selling utensils. For the assessment of tax payable under the Act for the period between 25th October, 1965, and 12th November, 1966, the assessee submitted the return. According to the assessee, his gross turnover was Rs. 9,10,384. The Sales Tax Officer, however, enhanced it to Rs. 9,22,000. He held that as the assessee had failed to maintain stock register and manufacturing account from day-to-day, it was not possible to rely upon the accounts submitted by the assessee. The Sales Tax Officer, therefo....

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....o the best of his judgment, as provided by section 18(4) of the Act, because the method of accounting employed by the assessee was such that assessment could not properly be made on that basis. Now, section 18(4) of the Act reads as under: "18. Assessment of tax..........   (4) If a registered dealer  (a) has not furnished returns in respect of any period by the prescribed date, or (b) has knowingly furnished incomplete or incorrect returns for any period, or (c) having furnished such returns fails to comply with any of the terms of a notice issued under sub-section (2), or (d) has not maintained any accounts or the accounts maintained by him are not in accordance with the provisions of sub-section (1) of section....

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....upport of that estimate is immaterial. Prima facie, the assessing authority is the best judge of the situation. It is his 'best judgment' and not anyone else's. The High Court could not substitute its 'best judgment' for that of the assessing authority. In the case of 'best judgment' assessments, the courts will have to first see whether the accounts maintained by the assessee were rightly rejected as unreliable. If they come to the conclusion that they were rightly rejected, the next question that arises for consideration is whether the basis adopted in estimating the turnover has a reasonable nexus with the estimate made. If the basis adopted is held to be a relevant basis even though the courts may think that it is not the most appropria....