Page 216 - GSTL_2nd July 2020 _Vol 38_Part 1

134 GST LAW TIMES [ Vol. 38
as held in many judgments that, if there is any ambiguity in the lan-
guage of statutory provisions, the benefit of that ambiguity must be
given to the assessee.
Secondly, the A.A has chosen to determine the turnovers on his best
judgment and presumes the suppression of outward taxable sup-
plies by the appellant on mere guess work. He has not conducted
any worthy verifications or elaborate enquiries. We have to read
and comprehend that Section 62 thoroughly before analyzing the
present issue. Hence Section 62(1) of the Act, is abstracted hereun-
der :-
Section 62(1)
“Notwithstanding anything to the contrary contained in section
73 or section 74, where a registered person fails to furnish the
return under section 39 or section 45, even after the service of a
notice under section 46, the proper officer may proceed to assess
the tax liability of the said person to the best of his judgment
taking into account all the relevant material which is available or
which he has gathered and issue an assessment order within a pe-
riod of five years from the date specified under section 44 for
furnishing of the annual return for the financial year to which
the tax not paid relates”.
A fundamental comprehension of above Section obviously makes it
perceivable that the best judgment assessment to be passed by any
authority shall be based on taking in to account of all the relevant
material, which is available or which may be gathered by such as-
sessing authority. But, the impugned finding does not speak of any
material collected by the AA, nor mentions any enquiries which es-
tablish the assumed turnover by the AA. In such circumstances, it is
to be held that the AA has not followed basic instructions read be-
tween in the contents of Section 62(1), hence not qualifies to be up-
held as bona fide.
In this connection, the following case laws are to be taken into con-
sideration before commenting on the AA’s best judgment orders.
(i) State of Orissa v. B.P. Singh Deo (1970) 76 ITR 690 - AIR 1970
SC 670.
In this case, the Hon’ble Supreme Court held that the power to
levy assessment on the best of judgment basis is not an arbi-
trary power, but such assessment must be based on best
judgment or on relevant material. It is not a power that can be
exercised on the sweet will and pleasure of the concerned authorities.
(ii) State of A.P. v. Ravuri Narasimhulu (1965) 16 STC 54 (APHC)
“The Legislature has confined the power of the department
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 cer-
tain 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 Income Tax,
Central and United Provisions v. Laxminarain Badridas (1937) (5
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