TMI Blog1985 (8) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances of the case, the Tribunal was justified in holding in making the assessment under section 19(1) of the Act the turnover will be confined to the established escaped turnover and resort to best judgment cannot be made?" The question has been reproduced exactly as framed by the Tribunal. In short, the question is: whether the Tribunal was justified in holding while making the reassessments under section 19(1) of the Madhya Pradesh General Sales Tax Act, 1958, that the turnover has to be confined only to the escaped turnover which had been definitely established and resort could not be made to best judgment assessment? 3.. The material facts giving rise to the above question of law are these. The assessee carries on business of gol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenged by placing reliance on a decision of this Court in H.M. Esufali v. Commissioner of Sales Tax [1969] 24 STC 1; 1969 MPLJ 228; AIR 1969 MP 134. The Board of Revenue (Tribunal) accepted the assessee's contention to this extent following the decision of this Court in H.M. Esufali's case [1969] 24 STC 1; 1969 MPLJ 228; AIR 1969 MP 134 and it held that the escaped turnover can be held to be established only to the extent definite transactions were found concealed and not in excess thereof. 6.. Subsequent to the order of the Tribunal, the Supreme Court reversed the above decision of this Court. The decision of the Supreme Court is Commissioner of Sales Tax, Madhya Pradesh v. H.M. Esufali [1973] 32 STC 77; AIR 1973 SC 2266. The depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proportion of 19 days to the total period of assessment. 8.. In upholding this view, their Lordships of the Supreme Court observed as under: "........ From this circumstance, it was open to the Sales Tax Officer to infer that the assessee had large scale dealings outside his accounts. The assessee has neither pleaded nor established any justifiable reason for not entering in his accounts the dealings noted in the bill book seized. It is obvious that he was maintaining false accounts to evade payment of sales tax. In such a situation, it was not possible for the Sales Tax Officer to find out precisely the turnover suppressed. He could only make an estimate of the suppressed turnover on the basis of the material before him. So long as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estimate is immaterial. Prima facie, the assessing authority is the best judge of the situation. It is his 'best judgment' and not of anyone else. 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 appropriate basis, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escaped turnover made. We have no doubt that there is such a nexus. * * * 15.. For the reasons mentioned above, we are unable to agree with the High Court that the Sales Tax Officer had arbitrarily assessed the assessee. * * * 17.. What is true of the assessment must also be true of reassessment because reassessment is nothing but a fresh assessment. When reassessment is made under section 19, the former assessment is completely reopened and in its place fresh assessment is made. While reassessing a dealer, the assessing authority does not merely assess him on the escaped turnover but it assesses him on his total estimated turnover. While making reassessment under section 19, if the assessing authority has no power to make best jud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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