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TMI Blog1973 (4) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 12(8) of the Act. In the accounts of the third party, the following transactions of the assessee were found: Date Amount 13-4-62 Rs. 504.27 P. " " 426.46 " 9-5-62 " 1,361.94 " 10-5-62 " 142.16 " 12-5-62 " 508.40 " " " 176.10 " 22-5-62 " 815.27 " -------------- 3,934.60 -------------- On verification of the assessee's accounts, the Sales Tax Officer did not find corresponding entries. The Sales Tax Officer accepted the entries in the third party's accounts to be correct and came to the conclusion that there were suppressions in the assessee's books of account. Though the total suppressions came to Rs. 3,934.60, the Sales Tax Officer made an estimate of the suppressed turnover of sales at Rs. 12,000 and demanded additional tax along with penalty of Rs. 100 from the assessee. The appeal filed by the assessee failed. In second appeal by the assessee, the Tribunal came to hold: "Certain pleas were taken by the Advocate for the appellant which were advanced in the forums below also, but they have been rightly rejected as unsustainable. The only point now for me to consider is, is Rs. 12,000 enhancement justified. This is a 12(8) proceeding with an imposition of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may at any time within thirty-six months from the expiry of the year to which that period relates call for a return under sub-section (1) of section 11 and may proceed to assess the amount of tax due from the dealer in the manner laid down in sub-section (5) of this section and may also direct, in cases where such escapement or under-assessment or composition is due to the dealer having concealed particulars of his turnover or having without sufficient cause has furnished incorrect particulars thereof, that the dealer shall pay, by way of penalty in addition to the tax assessed under this sub-section, a sum not exceeding one and a half times of the said tax so assessed." It is, therefore, clear that once the assessing officer comes to the conclusion that the turnover of a dealer has escaped assessment or has been under-assessed, he has to call for a return from the dealer under section 11(1) of the Act and is required to proceed with the assessment in the manner laid down under sub-section (5) of that section of the Act. Sub-section (5) of section 12 authorises assessment to the best of judgment. Therefore, under section 12(8) there can be an assessment by best of assessing office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s its validity. The assessing officer becomes entitled to cover the entire range of the turnover and may make a best judgment assessment. It is true, the extent of the escapement has got to be kept in view and, therefore, it requires to be indicated or ascertained. Our answer to the first question, therefore, shall be that on the facts and in the circumstances of the case, the Tribunal was not right in holding that it was the duty of the department to fix the actual amount of escapement. 6.. Question No. (ii): As already indicated, the quantum of suppression found was to the extent of Rs. 3,934.60. The assessing officer had in his order of reassessment stated: "........ The dealer to avoid tax has suppressed the transactions. Hence, no reliance can be put on the accounts produced by the dealer and as such, the same are rejected and assessment is made to the best of judgment. Considering the amount of suppression and the volume of trade, I honestly estimate the suppressed turnover of sales during the year at Rs. 12,000....." The first appellate authority in dealing with the matter came to say: "......I am fully convinced that the appellant has suppressed his purchases; thereby h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be a fair estimate of the proper figure of assessment, and for this purpose he must, their Lordships think, be able to take into consideration local knowledge and repute in regard to the assessee's circumstances, and his own knowledge of previous returns by and assessments of the assessee, and all other matters which he thinks will assist him in arriving at a fair and proper estimate; and though there must necessarily be guess-work in the matter, it must be honest guesswork. " Their Lordships again emphasized by saying: "........ To use the words of Lord Russell of Killowen again, '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 other matters which the assessing officer thinks will assist him in arriving at a fair and proper estimate ............" In this case the assessing officer did not indicate any foundation for his estimate apart from saying that he took into consideration the amount of suppression and the volume of trade. Learned standin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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