K MOIDBENKUTTY Vs. STO TIRUR

JUDGEMENT

(1.) This writ applicant has again raised the question which has often been mooted before this Court and before other courts as well. The question relates to the powers of the Sales Tax Officer to make a best judgment assessment under S.12 (2) (b) of the General Sales Tax Act, 1125. That Section enables the officer to assess a dealer "to the best of his judgment". That such an assessment involved an element of guess has always been accepted. It has also been accepted that in making such assessments there cannot be an arithmetical precision as the assessment should depend upon so many factors some of which at least are not capable of quantitative analysis. It must therefore be based on honest guesses to some extent. Even so, the courts have insisted that the process is a quasi judicial one and that therefore the assessments must be based on material. This has been ruled by the Supreme Court in Raghubar Mandal Harihar Mandal v. The State of Bihar reported in (1957) 8 STC. 770. The Supreme Court said:

(2.) This Court followed the decision in K. M. Alikoya & Co. v. State of Kerala reported in (1961) 12 S. T. C. 567 and applied the same principle in the decision in Appukutty v. Sales Tax Officer, Kozhikode reported in (1966) 17 S. T. C. 380. The decision of this Court in Ravjee Anant Goray and Sons v. Sales Tax Officer, Kozhikode and others reported in 1961 KLJ 931 to the same effect has been upheld by the Supreme Court in The State of Kerala v. C. Velukutty reported in (1966) 17 S. T. C. 465. That was a case where the secret account books recovered from the office of a dealer disclosed suppression to a certain extent. That was utilised for refixing the turnover relating to the branch office without any material relating to the suppression in the branch office. Their Lordships said that the element of guess which would enable the best judgment being made would not extend to making such conjectures which are based on no material and if at all, based on pure suspicion. Applying these principles, it appears to me that the order of assessment Ext. P1 imposing sales tax on the petitioner for the year 1964-65 cannot stand. The petitioner had kept books of account and had submitted a return. But during the course of the assessment proceedings it was discovered that certain declarations were made by two drivers of certain vehicles that passed through a particular check post on 12-9-1964 and on 9 2 1965. These declarations indicated that the petitioner had purchased 40 bags of jaggery which passed through the check post on 12-2-1964 and 60 bags which passed through the check post on 9 2 1965. The price of this 100 bags would come to about to Rs. 3000/-. What the officer has done is to take the average of these two and to assume that similar quantities have been brought through the check post by the dealer every week of the year. So he multiplied the average, namely Rs. 1400/- which is the price of the jaggery for about 50 bags by 52, the number 6f weeks in the year, and added Rs. 72,800/-to the turnover. It appears to me that no argument is necessary to convince anyone that this is arbitrary and based on pure conjectures and surmises. Nevertheless, it has been argued vehemently on behalf of the revenue that it is only a guess; an intelligent guess, and even an honest guess and that the fixation related to a question of fact and that, if at all the remedy of the petitioner is only by way of an appeal and not in proceedings under Art.226. In this I hear the echo of arguments that have been repeated several times in an attempt to stultify proceedings under Art.226 and I too wish to state again, though this too is repetition, that the jurisdiction under Art.226 is not trammelled by any such invariable rule that this Court cannot interfere when there is another remedy available to the petitioner. One thing is clear and that is when principles of natural justice have been violated this Court can interfere even if there is another and an equally efficacious remedy available to the petitioner. I cannot conceive of any case where such principles are ignored more than in the case of assessments that have been made on pure conjectures and surmises. The conjectures in this case are that though the goods were carried only on two days in the year i. e. on 12 9 1964 and 9 2 1966, that similar goods have been carried during every week of the year. There is no material whatever for thinking that similar goods have been carried on any other day during the year of assessment. Notwithstanding the nonavailability of material the assessing authority has assumed that every week of the year similar quantities have been carried by him through the check post. This assumption is without any basis. I therefore think that I should interfere under Art.226 of the Constitution and I quash Ext. P-1 order and allow this writ application. This of course will not preclude the assessing authority from requantifying the turnover and making any fresh assessment on the petitioner in the light of what is stated above and in accordance with law. There will be no order as to costs in this petition.