TaxTMI 
TaxTMI 
1960 (9) TMI 122
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....ment were incorrect and did not include all transactions the assessing authority is (under Section 10 of the Madhya Bharat Sales Tax Act) empowered to make best judgment assessment for the whole turnover estimated for the period of previous assessment or he can only make additional assessment of items proved to have escaped assessment previously. (2) Whether assessment of the assessing authority under Section 8(4) (a) is according to law in the circumstances of the case. (3) Whether it was incumbent on the assessing authority to have brought to the notice of the opposite party specific items which had escaped assessment and to have offered him an opportunity to rebut the evidence in regard to such specified items. The m....
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.... assessed at too low a rate in any year, the assessing authority at any time within a period of three years next succeeding that to which the tax or the licence fee, registration fee or the exemption fee relates, assess the tax payable on the turnover which has escaped assessment or levy the correct amount of licence fee, registration fee or exemption fee, after issuing a notice to the dealer and after making such inquiry as he considers necessary. It will be seen that under this provision if the assessing authority finds that any part of the turnover of the dealer has escaped assessment then the authority after issuing a notice to the dealer and making such inquiry as may be found necessary can "assess the tax payable on the turnover wh....
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....annot be made in proceedings for the assessment of any escaped turnover. Indeed, the provision in Section 10 that the escaped turnover shall be determined after issuing a notice to the dealer and after making necessary inquiry contemplates that a notice in conformity with Section 8 should be given and that the inquiry should be held in accordance with Sub-sections (2) and (3) of Section 8. If, therefore, when a notice is issued to the assessee under Section 8 and he is also called upon to produce his account books and other relevant records for scrutiny, and if the assessee fails to appear in response to this notice and fails to produce the material required of him, the assessing authority has jurisdiction to determine the escaped turnover ....
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.... the Commissioners ; but it was open to the Commissioners, as it seems to me, to conclude that this was not merely an isolated transaction 'but showed the kind of thing which was going on, and they were, in my view, entitled to come to the conclusion to which they did come from this incident, though one only, that there must have been other similar incidents and, therefore, that the accounts of the company could not be relied upon to show the whole of the trading profit of the company. These observations show that an estimate of escaped turnover or income can be made if the assessee fails to produce his account books or if the account books are found to be unreliable by the taxing authority. The best judgment assessment, therefore, m....