TMI Blog1971 (9) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... ns filed by the assessee were discovered from his own account books and the assessing authority included those items in his total turnover. For these reasons the High Court was justified in holding that the assessment of the first and the third items could not be regarded as based on best judgment. The penalty thus could not be levied in respect of those two items. - Civil Appeal No. 1404 of 1969, - - - Dated:- 16-9-1971 - HEGDE K.S. AND GROVER A.N. JJ T.A. Ramachandran, Advocate, for the respondent. S.T. Desai, Senior Advocate (A.V. Rangam and A. Subashini, Advocates, with him), for the appellant. -------------------------------------------------- The judgment of the court was delivered by GROVER, J.- This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parts and as it was not possible to separate the first sales from the general entries in the account books it was necessary to make assessment on best judgment. The assessment was completed but certain penalty was levied on the assessee. The assessee appealed to the Appellate Assistant Commissioner who took the view that the failure of the assessee to disclose the taxable turnover in the monthly returns was due to a bona fide impression on the assessee's part that it would be sufficient if correct figures were furnished at the time of the final assessment. He, therefore, imposed a nominal penalty. The Board of Revenue in exercise of its power under section 34 of the Act set aside the order of the Appellate Assistant Commissioner. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in two events: (i) if no return has been submitted by the dealer under subsection (1) within the prescribed period, and (ii) if the return submitted by him appears to be incomplete or incorrect. Sub-section (3) empowers the assessing authority to levy the penalty only when it makes an assessment under subsection (2). In other words, when the assessing authority has made the assessment to the best of its judgment, it can levy a penalty. It is well-known that the best judgment assessment has to be on an estimate which the assessing authority has to make not capriciously but on settled and recognised principles of justice. An element of guess-work is bound to be present in best judgment assessment but it must have a reasonable nexus to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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