TaxTMI 
TaxTMI 
2023 (7) TMI 1233
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....th 3- star facilities. 2. ST.Rev.No.9 of 2023:- The books of accounts and trading accounts of the petitioner-assessee in respect of the sale of beer, wine and liquor, for the assessment year 2018-19, were called for by the assessing authority and a notice was issued. The assessee failed to produce the books of accounts. Hence, a preassessment notice dated 20.10.2021 was issued. The assessee failed to file any objection against the pre-assessment notice. In such circumstances, the assessing authority fixed gross profit (GP) at the rate of 80%, during the 3-star period, to complete the assessment for the year 2018-19 on the basis of 'best judgment assessment', as stated in Annexure-A assessment order dated 24.01.2022. 2.1. Challenging the o....
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....ssued. The assessee failed to file any objection against the pre-assessment notice. In such circumstances, the assessing authority fixed gross profit at the rate of 80%, during the 3-star period, to complete the assessment for the year 2017-18 on the basis of 'best judgment assessment', as stated in Annexure-A assessment order dated 24.01.2022. 3.1. Challenging the order of assessment, the assessee filed an appeal before the Joint Commissioner (Appeals), Thrissur as S.T.A. No. 130 of 2022. According to the assessee, the documents contained in Annexure-B list were produced before the first appellate authority. By Annexure-C order dated 16.05.2022, the first appellate authority disposed of S.T.A. No. 130 of 2022, by modifying the order of as....
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....authority for the year 2015-16 and 2016- 17 at 65%, in the assessment orders dated 11.03.2020 and 16.03.2020. 6. Per contra, the learned Special Government Pleader (Taxes) for the respondent would contend that the orders of the authorities below in fixing the gross profit at 70% of the cost of the goods sold for the assessment years 2017-18 and 2018-19, in the absence of any materials, on the basis of best judgment assessment, are perfectly legal, which warrant no interference in these S.T. Revisions. The learned Special Government Pleader would place reliance on the decision of this Court in R.Prabhakaran v. State of Kerala [2008:KER:53173] - S.T. Revision No.331 of 2008 dated 03.12.2008. 7. For the assessment years 2017-18 and 2018-19,....
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....essing authority estimated the gross profit after taking into account various aspects such as the nature of business, prevailing trends in the line of business and the external expenses appurtenant to the running of a 3-star bar attached hotel. The assessee challenged the orders of the first appellate authority before the Sale Tax Appellate Tribunal, Additional Bench, Kozhikode, which ended in dismissal by the orders dated 03.11.2022. 9. The law relating to best judgment assessment is the same both in the case of 'income tax assessment' as well as 'sales tax assessment'. The scope of best judgment assessment under the income tax law came up for consideration before the Judicial Committee in Commissioner of Income Tax, Central and U.P. v. L....
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....e estimate and is based on a rational basis, the fact that there is no good proof in support 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 cannot 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 assesses were rightly rejected as unreliable. If the courts 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 ....
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....nch of this Court held that, except in exceptional cases, the High Court, in the exercise of its powers under Section 41 of the Kerala General Sales Tax Act, is not expected to substitute its best judgment assessment to the best judgment assessment already completed by the assessing authority and confirmed by the first appellate authority and the Tribunal. The law on the point is well settled by the decision of the Apex Court in the case of Commissioner of Sales Tax v. H.M. Esufali H.M. Abdulali [(1973) 32 STC 77]. 14. In the instant case, in Annexure-A assessment orders for the year 2017-18 and 2018-19, the assessing authority fixed gross profit at the rate of 80%, to complete the assessment for those years on the basis of 'best judgment ....