SETH, J. - (1.) THE assessee Bhag Singh Khandsari is a manufacturer and dealer in gur and khand. He claimed that, during the assessment year in question (1957-58), he sold all the gur and khand manufactured by him through Messrs. Atma Ram Om Prakash and declared his turnover as Rs. 64,173-9-6. However, his books were not accepted and the Sales Tax Officer made a best judgment assessment under rule 41(5) of the Rules framed under the U.P. Sales Tax Act and estimated his turnover as Rs. 70,000. Subsequently, an information was received that, during the year in question, the assessee had sold goods worth Rs. 1,39,607 through Messrs. Atma Ram Om Prakash. Consequently, the proceedings under section 21 were initiated and the Sales Tax Officer again made a best judgment assessment and estimated the turnover of the assessee that had escaped assessment as Rs. 1,10,000.
(2.) IN appeal, it was contended that the information received by the department in this case was that the assessee's total turnover was Rs. 1,30,607-0-6 from out of which he had already declared the turnover amounting to Rs. 64,169-9-9. Consequently, the Sales Tax Officer was not justified in estimating and determining his escaped turnover at Rs. 1,10,000. He could not make an estimate of the turnover and determine the petitioner's escaped turnover in excess of the difference between Rs. 1,39,607-0-6 and Rs. 64,169-9-9, i.e. Rs. 75,437-6-9. The Assistant Commissioner (Judicial) relying upon a decision of this court in the case of Pooran Mal Kapoor Chand v. Commissioner of Sales Tax, U.P. (S.T.R. No. 147 of 1957 decided on 30th July, 1963), accepted the submission made on behalf of the assessee and held that in the proceedings under section 21 of the Act the assessee could not be assessed to tax on a turnover in excess of Rs. 75,437-6-9, the amount which, according to the information received by the Sales Tax Officer, had actually escaped assessment at the time when best judgment assessment order under rule 41(5) was made. The Additional Judge (Revisions), Sales Tax, Meerut, by his order dated 8th October, 1969, dismissed the revision filed by the Commissioner of Sales Tax and upheld the order passed by the Assistant Commissioner (Judicial), Sales Tax. Subsequently, this court, at the instance of the Commissioner of Sales Tax, U.P., directed the Judge (Revisions), Sales Tax, to state the case and refer the following question for its opinion : "Whether, on the facts and in the circumstances of the case, the assessing authority could make an assessment to the best of his judgment under section 21 of the U.P. Sales Tax Act in a case where the original assessment under section 7(3) of the said Act had also been completed to the best of judgment ?" Section 21(1) of the U.P. Sales Tax Act runs thus : "If the assessing authority has reason to believe that the whole or any part of the turnover of the dealer has, for any reason, escaped assessment to tax for any year, the assessing authority may, after issuing notice to the dealer, and making such enquiry as may be necessary, assess or reassess him to tax : Provided that the tax shall be charged at the rate at which it would have been charged had the turnover not escaped assessment, or full assessment, as the case may be. Explanation. - Nothing in this sub-section shall be deemed to prevent the assessing authority from making assessment to the best of its judgment." This section contemplates that if the assessing authority has reasons to believe that the whole or any part of the turnover of a dealer has, for any reason, escaped assessment to tax for any year, the assessing authority can after issuing notice to him and after making such enquiry, as may be necessary, assess or reassess him to tax. The jurisdiction to initiate proceedings under section 21 and to assess or reassess the assessee to tax under that section arises when the assessing authority has reasons to believe that whole or any part of the assessee's turnover has escaped assessment to tax. It does not depend upon the circumstances in which the original assessment under section 7(3) of the Act read with rule 41(5) of the U.P. Sales Tax Rules was made. For this purpose, it would be wholly immaterial whether the original assessment had been completed on the basis of the returns found to be reliable or was made on the basis of best judgment after rejecting the assessee's books. Section 21(1) does not lay down that once an assessment on the basis of best judgment has been made under section 7(3), the assessing authority cannot have reasons to believe that whole or part of the dealer's turnover has escaped assessment. Once the jurisdiction to reopen assessment proceedings under section 21(1) of the U.P. Sales Tax Act accrues, the explanation to that section makes it absolutely clear that the assessing authority can in suitable cases make an assessment to the best of its judgment.
(3.) IN the case of Pooran Mal Kapoor Chand v. Commissioner of Sales Tax, U.P. (S.T.R. No. 147 of 1957 decided on 30th July, 1963), one of the questions that had been REFERRED TO this court for opinion was : "Whether the assessment made under section 21 on the 31st October, 1949, was a valid assessment ?" ;