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TMI Blog1975 (3) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... ates to the circumstances under which and the manner in which an estimate of turnover should be made in the case of assessment to sales tax. The principles to be applied in such cases, it is not disputed, should be the same as that applied in assessing a person to income-tax or agricultural income-tax when estimate of the income had to be made and on this question of estimate of income-tax the Judicial Committee had pronounced in Commissioner of Income-tax, Central and United Provinces v. Laxminarain Badridas[1937] 5 I.T.R. 170 (P.C.). If we may say so with great respect, there is a classical statement in the judgment which has not been improved upon till now by the numerous pronouncements on the subject. We said so in a recent Full Bench d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reedom is given to the assessing authority. The restraints on what he does, which has been repeatedly called an honest guess, are only that he should not act in an arbitrary, capricious or whimsical manner and further that there must be some relevant material forming the basis of his guess. Circumstances and material on which he can act may appear to be flimsy. The mere fact that the estimate is on the basis of a guess will not make the estimate liable to be set aside by a court as long as there is a nexus between the estimate made and the materials that were available before the assessing authority. It is unnecessary to refer to the numerous decisions on the subject. But we may extract a passage from the decision of the Supreme Court in Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis. That may be so. But in the absence of any other method to find out the actual production of oil, etc., the calculation of the turnover on the basis of the consumption of electricity can also be adopted." 4.. No doubt the learned Judges proceeded to further state that a test check was conducted for crushing of oil and none had been conducted as regards decortication and grinding of oil-cake and the reliance on the basis of two units per bag without any test cheek as far as decorticating and grinding was concerned appeared to be somewhat arbitrary. If the passage meant that without a test check an assessing authority should not make an estimate of turnover on the basis of current consumption provided that there is some indication th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper book. The total consumption of electricity, which incidentally was accepted, was 21,187 units. Out of this, 11,600 units were consumed for crushing copra. 9,255 units were consumed for making wheat flour out of wheat and 50 units for crushing gingerly and the remaining 282 units for lighting purposes. He arrived at 11,600 units for crushing copra by calculating the current consumption at 10 units per quintal. It cannot be urged with any force that there was no material at all before the assessing authority for adopting 10 units as the current required for crushing one quintal of copra. 7.. Even if the average consumption of electricity in similar establishments is taken into account, it cannot be argued that the basis adopted is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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