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2020 (12) TMI 280 - HC - VAT and Sales TaxPrinciples of natural justice - best judgement assessment done by ex-parte order - case of revisionist is that the manner of best judgement assessment was wholly arbitrary and illegal inasmuch as only one bill recovered or produced by the Mobile Squad was found to be non-genuine - Enhancement of taxable turnover - whether determination of turn over is commensurate to the material and evidence available on the record? - inclusion of Inter State Sales - benefit of input tax credit - HELD THAT:- The jurisdiction of the Assessing Authority while taking recourse to the 'best judgement assessment' is well settled. The Supreme Court in the case of S.M. HASAN, S.T.O., JHANSI VERSUS NEW GRAMOPHONE HOUSE, JHANSI [1975 (9) TMI 177 - SUPREME COURT] has categorically held that while assessing, on the basis of 'best judgement', the Assessing Authority has to make the assessment honestly and on the basis of an intelligent well-grounded estimate rather than upon pure surmises. The assessment so made while taking recourse to the 'best judgement assessment' should not be speculative or fanciful but on reasonable guess based upon the material available before the Assessing Authority. In the present case, admittedly, the one tax invoice, which was found to be fake, was of ₹ 11,970/- and solely on the basis of the said invoice, the evaded sales has been assessed at ₹ 26,15,000/- i.e. 100% of the disclosed sales. The Assessing Authority is bound to act in a rational manner while resorting to best judgement assessment in view of the facts on record it is clear that only one bill of ₹ 11,570/- was available as material to assess the evaded sales. There was nothing more before the Assessing Authority to form an opinion that sales equal to the declared sales should be determined as evaded sales - the evaded sales should be quantified as ₹ 2,61,500/- that is the 10% of the total disclosed sales for the purposes of determining in the tax liability - The liability of payment of tax shall be calculated for the year 2014-15 treating evaded sales at ₹ 2,61,500/-. Revision allowed in part.
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