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TMI Blog1959 (12) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... ve opportunity of hearing was given to him. 2. Whether in the circumstances of the case, the assessment, being arbitrary and a pure conjecture and based on no material on record, is bad and liable to be set aside." The relevant facts of the case are as follows:- For the assessment year 1955-56, the assessing officer fixed a provisional assessment of Rs. 6,600. The petitioner accordingly paid that sum. He failed to submit the annual return, Form A, for final assessment of that year 1955-56. The Sales Tax Officer repeatedly called on the petitioner to produce his accounts or appear before him and posted the case to various different dates, 19th December, 1956, 5th January, 1957, and 15th February, 1957. The party did not appear or produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner frankly stated that he was not taking any such ground in this Court. He admitted that the refusal of the adjournment by the Sales Tax Officer on 15th February, 1957, may be treated as a good basis for an ex parte assessment but contended that the assessment order suffered from the defects that no material is disclosed in it as the basis of the assessment and that no opportunity was given to him to represent as regards the quantum of turnover and tax which the officer fixed. Rule 13 of the Hyderabad General Sales Tax Rules runs as follows: "13. If no return is submitted by the dealer as required by rule 11 or if the return submitted by him appears to the assessing authority to be incorrect or incomplete, such authority shall, after ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not mention any notice at all. In Polisetti Subbaraidu and Co. v. Commissioner of Income-tax Hyderabad[1958] 2 An. W.R. 412; 34 I.T.R. 492., it was held by this Court as follows: "The proviso to section 13 of the Income-tax Act empowers the Income-tax Officer to assess the profits on such basis and in such manner as he thinks proper where he comes to the conclusion that the income and profits could not be properly deduced from the accounts of the assessee. But the power of the Income-tax Officer under this proviso is not an arbitrary power. He must exercise his discretion and judgment judicially and reasonably...If the Income-tax Officer proposes to use against the assessee the result of any private enquiry made by him, he should put th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law; but he is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. There must be something more than bare suspicion to support the assessment. When the returns and the books of account are rejected, the assessing officer must make an estimate and to that extent he must make a guess; but the estimate must be related to some evidence or material and it must be something more than mere suspicion. He must make what he honestly believes to be a fair estimate of the proper figure of assessment and for this purpose he must take into consideration such materials as the assessing officer has before him, including the assessee's circumstances, knowledge of previous returns and all othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would appear that the gross turnover as fixed by the Sales Tax Officer in his assessment order is very nearly the same as the gross turnover which the petitioner has shown as per his accounts; the margin of difference is only about 4 per cent. This suggests that the enquiry which the officer has made was probably a reasonable enquiry which yielded particularly accurate results. The learned Advocate for the Department has shown us with reference to figures available, that the tax of Rs. 16,230-2-0 fixed by the Sales Tax Officer is not much different from the figure which would be arrived at proportionate for the turnover of 4 lakhs if calculated at the same rate (in the same proportion) as the rate of tax which was assessed and paid by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal has been on the basis that he ought to have been given one more opportunity. But there is a ground urged in the memorandum of appeal before the Tribunal as follows: "The estimation made by the Sales Tax Officer is very high and quite arbitrary without any basis on the records." And a similar ground has been urged in the appeal before the Deputy Commissioner of Sales Tax. We consequently hold that the plea urged in this Court before us cannot be said to be entirely new and not thought of in the earlier stages by the assessee. So, we hold as follows: Point No. 1: The assessment by best judgment is bad in that no material is disclosed to the assessee as the basis of the assessment and that no effective opportunity has been given to him ..... X X X X Extracts X X X X X X X X Extracts X X X X
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