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TMI Blog1968 (10) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 1962-63, by which the dealer's general turnover was increased by the assessing authority by a sum of Rs. 29,455. The dealer had, in due course, appealed against this order and it appears that during the pendency of the appeal, there was a surprise inspection of the business premises of the dealer on the 30th September, 1963. Five books of account were seized for the purpose of detailed verification and on verification, the assessing authority came to the conclusion that two of these books contained clandestine transactions, resulting in tax evasion for the same assessment year and as assessment had already been completed, the assessing authority came to the conclusion that reasonable grounds existed for believing that the turnover for the assessment year 1962-63 had escaped assessment. A proceeding under section 18(1) was commenced and the dealer was noticed. An objection was raised by the dealer on the ground that the notice issued under section 18(1) was illegal and that the seized books did not contain any material in respect of the period 1962-63. The objection was overruled by the assessing authority by an order passed on the 29th November, 1963. The dealer was ordered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was held that the earlier appellate order of the year 1964 was no bar to the assessing authority to reopen the assessment, when it was satisfied that reasonable grounds existed for believing that the turnover of a registered dealer in respect of any period had, for any reason, escaped assessment. The second contention raised was that the assessing authority and the appellate authority had acted illegally in overlooking that section 18(1) of the Act contemplated assessment in respect of the actual amount discovered as suppressed or having escaped assessment. It was urged that the provision of section 18 of the Act did not clothe the assessing authority with jurisdiction to make best of judgment assessment. The Tribunal rejected this contention holding that when a proceeding was initiated under section 18(1) of the Act, section 16(2)(b) read with sub-section (3) of that section provided a machinery for completing the assessment after issue of notice under section 16(2)(a) of the Act. In these circumstances, the two questions, quoted above, have been referred to this court. 4.. Sri Kanhaiya Prasad Verma No. 2 has contended, in respect of question No. (1), that, when the Deputy Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commercial Tax Officer III, Dindigul[1966] 18 S.T.C. 357., is the latest and it has dealt with some earlier decisions mentioned therein. Sri Verma has relied upon this decision on behalf of the assessee, whereas Sri Sarwar Ali has made an attempt to distinguish the case from the instant case. According to Sri Sarwar Ali the view expressed in the decisions not followed by the Full Bench of the Madras High Court lays down the true test in any event. In my opinion, the Full Bench decision of the Madras High Court is clearly distinguishable, apart from the fact that the decision was based on the legislative history of the law on this matter in the State of Madras. The following observations of the learned Judges of the Madras High Court will illustrate the point: "Evidently the framers of section 16, as it stands today, intended that such a power need not be given to the assessing authority and that is why, as we are inclined to think, the words in Tax rule 17 under Act 1939, which, as we said, is the predecessor of section 16, namely 'determine the turnover by best judgment', have been omitted in section 16(1)." It seems that the Bihar Act of 1959 includes "best of judgment" asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and place to be specified therein, either to attend in person or through an authorised representative or to produce or to cause to be produced any accounts and other evidence on which such dealer may rely in support of such returns. (b) On the day specified in the notice or as soon thereafter as may be, the prescribed authority shall, after examining the accounts and other evidence produced by the dealer and such other evidence as the prescribed authority may, by notice in writing, require on specified points, assess the amount of tax due from the dealer. (3) If a registered dealer, having furnished returns in respect of a period, fails to comply with all the terms of the notice under subsection (2) or if the accounts and other evidence produced by him are, in the opinion of the prescribed authority, incorrect, incomplete or unreliable, either wholly or partly, the said authority shall assess, to the best of its judgment, the amount of tax due from the dealer." Section 18. "Turnover of registered dealer escaping assessment.-(1) If upon information which has come into his possession, the prescribed authority is satisfied that reasonable grounds exist to believe that any turnove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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