S.T.REV No. 67 of 2006 · Kerala High Court

H.L.Dattu,C.J. & A.K.Basheer,J.--------------------------------------------S.T.Rev. No.67 of 2006-------------------------------------------Dated, this the 18th day of June, 2008ORDERH.L.Dattu,C.J. The petitioner is running a Bar attached Hotel. He hasregistered himself as dealer both under the provisions of the KeralaGeneral Sales Act, 1963 (“K.G.S.T.Act” for short) and Central Sales TaxAct, 1956 (“C.S.T.Act” for short). He was borne on the files of the Assistant Commissioner (Assessment), Commercial Taxes, SpecialCircle, Thrissur.

The petitioner has filed his annual returns for theassessment year 1998-99 and in that, apart from others, he had concededthe sale of cooked food in a sum of Rs.13,63,874/-, though the actualpurchase of the cost of consumables was in a sum of Rs.11,92,458 and thecost of firewood, etc. in a sum of Rs.1,15,105.75. The assessing authoritybeing of the opinion that the return so filed by the petitioner is untrue andincorrect, had rejected the same and had proceeded to complete theassessments by best judgment assessment and in that had made anaddition of 165% to the conceded turnover on the sale of cooked food.

In the appeal filed, the appellate authority has modifiedthe estimation made by the assessing authority in so far as the cookedfood is concerned and the same is reduced to 150% . This estimation by S.T.Rev.67/2006 - 2 -the first appellate authority is confirmed by the Tribunal.

This is the best judgment assessment based onestimation. This best judgment assessment cannot be substituted by us inexercise of our powers under Section 41 of the K.G.S.T.Act. The law onthe point is now well settled. The apex Court in the case of Commissionerof Sales Tax v.H.M.Esufali H.M.Abdulali [(1973) 32 STC 77] hasobserved as under:

In estimating any escaped turnover, it is inevitablethat there is some guess-work. The assessing authoritywhile making the best judgment assessment, no doubt, should arrive at his conclusion without any bias and on arational basis. That authority should not be vindictive orcapricious. If the estimate made by the assessing authorityis a bona fide estimate and is based on a rational basis, thefact that there is no good proof in support of that estimate isimmaterial. Prima facie, the assessing authority is the bestjudge of the situation. It is his best judgment and not anyoneelse's. The High Court cannot substitute its best judgmentfor that of the assessing authority

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The parameters of the revisional jurisdiction of this Courtis very much limited. This can be only on two circumstances - firstly, ifthe Tribunal has decided erroneously, and, secondly, has failed to decideany question of law. S.T.Rev.67/2006 - 3 -6. In the instant case, since the assessment is made purelyon estimation basis and that estimation can by no stretch of imaginationbe characterised as arbitrary, illegal, irregular, improper or capricious, weneed not have to upset the factual findings of the Tribunal. Therefore, therevision petition requires to be rejected and it is rejected and the questionsof law framed by the assessee are answered against the assessee and infavour of the Revenue.7. I.A.No.805 of 2006 is dismissed. Ordered accordingly. H.L.Dattu Chief Justice A.K.Basheer Judgevku/DK