(1.) THIS is a revision by the assessee against the decision of the Sales Tax Appellate Tribunal in respect of the assessment for the year 1956-57. The assessee is a dealer in firewood and timber having his head office at Lakkadi. For the year of assessment 1956-57 the assessee had filed a return before the Sales Tax Officer, Perintalmanna, showing a net turnover of Rs. 45,985-8-2. The accounts were accepted and the tax assessed was duly paid by the assessee.
(2.) THE assessee has a fuel depot at Kanjikode with a depot-keeper in charge of it. On 18th August, 1958, the Sales Tax Officer of Alathur paid a surprise visit to the depot and recovered two rough account books, one for the period 18th January, 1957, to 13th July, 1957, and the other for the period 2nd August, 1958, to 17th August, 1958, marked as Exhibits 'A' and 'B' and seven G.V.R. form books maintained under the provisions of the Motor Vehicles Act in respect of two lorries K. L. P. 1040 and M. D. M. 4559. On the basis of the details gathered from these books the Sales Tax Officer, Perintalmanna, took proceedings against the assessee on the escaped turnover. Notice, enclosure B, was issued to the petitioner proposing to estimate his suppressed turnover as follows :- Actual sales turnover from 18-1-57 to 31-3-57 as per book 'A' ... Rs. 17,247-1-0 Estimated value of 1379 tons firewood at Rs. 30 per ton for the period from September, 1956, to March, 1957 ... Rs. 41,400-0-0 Estimated turnover suppressed from September, 1956, to March, 1957 ... Rs. 58,647-1-0 Add estimated turnover suppressed for the remaining 5 months of 1956-57 at Rs. 8,378 per mensem ... Rs. 41,890-0-0 ----------------- Turnover suppressed .. Rs. 1,00,537-1-0 or Rs. 1,00,537-0-0 -----------------
(3.) THE learned counsel referred to some decisions bearing on this question. THE first decision is the Privy Council decision in Commissioner of Income-tax, U.P. & C.P. v. Badridas Ramrai Shop ([1957] 5 I.L.R. 170; A.I.R. 1937 P.C. 133). Lord Russell of Killowen in delivering the judgment of their Lordships made the following observations as respects a "best judgment" assessment within the meaning of section 23(4) of the Indian Income-tax Act : "THE officer is to make an assessment to the best of his judgment against a person who is in default as regards supplying information. He must not act dishonestly, or vindictively or capriciously, because he must exercise judgment in the matter. He must make what he honestly believes 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 guess-work."