Page 156 - GSTL_18th June 2020_Vol 37_Part 3

370 GST LAW TIMES [ Vol. 37
“The Legislature has confined the power of the depart-
ment under this sub-section to assessing such turnover as
is shown to have escaped assessment and has not extended
it to estimate depending upon inferences to be drawn by the
department from certain circumstances. It does not clothe the
department with power to make a best judgment assessment.”
(iii) The Privy Council in the case of Commissioner of In-
come Tax, Central and United Provisions v. Laxminarain
Badridas (1937) (5 ITR 170, 180) observed that the As-
sessing Authority must not act dishonestly, or vindictively
or capriciously because he must exercise judgment in the
matter.
(iv) Honorable STAT in the case of M/s. Sri Krishna Timber
Depot, Jammalamadugu v. State of A.P. (14 APSTJ 238),
wherein it was held that “A presumption without basis,
on mere suspicion cannot be sustained. Suspicion can on-
ly lead to investigation and unearthing material on
which any conclusion can be based, but on mere sus-
picion without further investigation no inference can
be drawn and no conclusion can be arrived at”.
(v) Hon’ble Delhi High Court vide its order dated 27-5-
1998 in the case of Deepak Industries v. STO & Others
(Delhi High Court) 38 DSTC J-79; 73 (1998) DLT 718;
1998 (46) DRJ 208 held as follows :-
To sum up, the principles governing a best judgment
assessment are :
1. A best judgment assessment is not a wild
assessment. Exclusion of arbitrariness and
caprice is an obligation implicit in the power
to assess to the best of judgment.
2. Assessment to the best of judgment must be
founded upon some rational basis, relevant
material and logic so that nexus between
such basis or material and the figure of as-
sessment arrived at can be objectively seen
though some amount of guess work or esti-
mation is to be allowed like a play in the
joint.
Though, the above case laws are pertaining to Sales Tax/Income
Tax Acts, but the principles and concepts regarding the best judg-
ment assessment formulated by the earlier judicial pronouncements
would be squarely applicable to the GST disputes also.
The essential principle emerges from the above judgments is that
presumption of sale or purchase turnover is not any substitute for
the proof of sale/purchase. Any presumption shall always linked to
some sort of material like bills, vouchers or payment consideration
evidence, etc. If the estimation is not based on any evidences, such
factual presumptions are always rebuttable. That’s why in the in-

GST LAW TIMES  18th June 2020  156