Section 14(4) of the Andhra Pradesh General Sales Tax Act, 1957, does not empower the assessing authority to make a best judgment assessment of turnover that has escaped assessment.

CHANDRA REDDY, C. J.

( 1 ) THE common question that is presented by these revisions bears upon section 14 of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as the Act ). This question arises in the following circumstances. The respondent in all the petitions is a dealer in iron and iron scrap at secunderabad. T. R. C. No. 270 of 1963 relates to the assessment year 1954-55 and it is sufficient for the purposes of this enquiry to state briefly the facts of that case. For that year, the respondent returned a gross turnover of Rs. 90,099-10-3 and a net turnover of Rs. 70,505-6-8, claiming exemptions for the balance on the grounds which need not be set out here. The assessing authority discovered some discrepancies in the account books and therefore re-estimated the turnover at Rs. 1,22,456 on the 13th of July, 1956. Sometime later, on the 3rd September, 1957, there was a surpiise inspection by the Special Commercial Tax Officer, who deals with tax evasions, and he seized an exercise book relating to credit sales. On verification it was found that several entries were not brought into regular account books which amounted to Rs. 37,800 for two and half months. It was also found that four pages were missing. The sales covered by these missing pages were estimated at Rs. 6,400. Thus, they arrived at Rs. 44,200 as the unaccounted for credits.

( 2 ) ON the basis of these suppressed sales, the assessing authority made a best judgment assessment. An appeal was carried by the aggrieved assessee to the deputy Commissioner of Commercial Taxes, who sustained the assessment on the ground that the relevant statutory provision permitted such an estimate. But on further appeal by the assessee, the Sales Tax Appellate Tribunal reversed it differing from the department on the ambit and scope of section 14 (4) of the act.

( 3 ) AS the controversy to be resolved in these cases centres round section 14. of the Act, it is useful to read it here :"14. (1)If the assessing authority is satisfied that any return submitted under section 13 is correct and complete, he shall assess the amount of tax payable by the dealer on the basis thereof ; out it the return appears to him to be incorrect or incomplete he shall, after giving the dealer a reasonable opprtunity of proving the correctness and completeness of the return submitted by him due from such, inquiry he deems necessary, assess to the best of his judgment, the amount of tax yeras the dealer. An assessment under this section shall be made only within a period of four years from the expiry of the year to which the assessment relates. (2) when making an assessment to the best of judgment under sub-section (1) the assessing authority may also direct the dealer to pay in addition to the tax assessed, a penalty not exceeding one and half times the tax due on the turnover that was not disclosed by the dealer in his return. (3) If noreturn is submitted by any dealer liable to tax under this Act before the date prescribed in that the assessing authority may, at any time within a period of four years from the expiry of the year to which assessment relates, after issuing a notice to the dealer and after making such penalty not as he consider necessary, assess to the best of his judgment, the amount of tax due from the dealer on his turnover for that year and may direcst the dealer to pay, in addition to the tax so assessed a penalty not exceeding one and half times the amount of that tax. (4) where for any reason, the whole or any part of the turnover of business of a dealer has escaped assessment to tax or has been under-assessed or assessed at too low a rate, or where the licence fee or registration fee has escaped levy or has been levied at too low a rate, the assessing authority may, at any time within a period of four years from the expiry of the year to which the tax or the licence fee or registration tee relates, assess the tax payable on the turnover which has escaped assessment

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