Page 217 - GSTL_2nd July 2020 _Vol 38_Part 1

2020 ] IN RE : OMSAI PROFESSIONAL DETECTIVE AND SECURITY SERVICES PVT. LTD. 135
ITR 170, 180) observed that the Assessing Authority must not
act dishonestly, or vindictively or capriciously because he must ex-
ercise 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 only lead to investigation and un-
earthing material on which any conclusion can be based but
on mere suspicion 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 3-79; 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 assessment arrived at can be objectively seen though
some amount of guess work or estimation is to be al-
lowed 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-
stant case also, the AA has not brought on record any evidence of
such kind. That means, without any incriminating material to estab-
lish the assumed suppressions of taxable supply of services, best
judgment orders cannot be upheld as de jure.
It is further reasonable here to note that the main principle ema-
nates from the decisions on the best judgment assessment is that
any levy basing on mere presumptions, but not substantiated by
any sort of incriminating material to establish the suppression in-
dubitably, shall be seen as bad in law and in violation to the princi-
ples of natural justice.
Any best judgment assessment must be supplemented by reason,
because reason is the heart beat of any conclusion and fetches clarity
in conclusion of any order, as such, without the reason best judg-
ment orders becomes lifeless and amounts to denial of fundamental
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