The main legal point established in the judgment is that best judgment assessment can only be made if the return submitted by the dealer appears incomplete or incorrect, and after providing the dealer with a reasonable opportunity to prove the correctness or completeness of the return.

DR. A. S. ANAND, C.J.

This tax revision case has been filed by the assessees against the order of the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Madras, in T.A. No. 524 of 1981, dated November 3, 1981.

2. Brief facts are these : The assessees are dealers in glass sheets and mirrors. They reported a total and taxable turnover of Rs. 15, 10, 088.95 and Rs. 7, 61, 739.49 for the assessment year 1979-80. The assessing authority checked their accounts in support of their returns and discovered that the total and taxable turnover for the year 1979-80 worked out to Rs. 15, 31, 088.91 and Rs. 7, 61, 739.49, respectively. The sales of glass sheets and mirrors are for an amount of Rs. 7, 48, 349.42 and second sale of car at Rs. 21, 000. The assessing authority found that the accounts disclosed gross loss in trade during the year while the gross profit in respect of second sales of glass was worked out at 41 per cent. The assessing authority also found that the assessees did not maintain any separate account for the local and inter-State purchases of goods during the year under assessment though they had purchased goods from dealers outside the State as well as locally. On the best of judgment, the assessing authority, therefore, determined the turnover taxable at 10 per cent at Rs. 11, 84, 080 by adding 30 per cent towards gross profit in respect of inter-State purchase value of glasswares. Thus, the addition of Rs. 4, 22, 341 to the taxable book turnover was the consequential result. Final orders were passed determining the total and taxable turnover at Rs. 20, 23, 523 and Rs. 11, 84, 040, respectively. The assessees went up in appeal before the Appellate Assistant Commissioner. The dispute in the appeal was limited to the addition of Rs. 4, 22, 341 to the taxable turnover of the assessees. It was pleaded before the Appellate Assistant Commissioner that the assessment order was arbitrary and whimsical and that in the facts, and circumstances of the case, recourse to best of judgment assessment was not permissible. According to these assessees, the assessing authority was not justified in taking recourse to the best of judgment assessment only on account of the fact that the assessees had not maintained stock accounts and separate account for the local and inter-State purchases as required by the Rules. It was maintained by the assessees that since not a single omission had been established to pull up the total turnover nor any wrong classification made and the stocks at the beginning and close of the year were not taken into account at all, while computing the first sales, an arbitrary method had been adopted to determine the gross profit of 30 per cent to the accounted first purchases by the assessees and therefore, the order of assessment was not justified. The Appellate Assistant Commissioner, however, found that the defects pointed out by the assessing authority, viz., (a) that the dealers did not maintain stock register and were not in a position to give details of the source of the purchases of the goods sold in other States, and (b) that the gross profit for second sales was huge and gross loss and had been shown in the trade justified the assessing authority resorting to best of judgment assessment in the case. However, so far as the quantum of addition made by the assessing authority was concerned, the taxable turnover was reduced by a sum of Rs. 69, 000 on the ground that compounding fee had been paid for the consignment which had been subjected to cheek by the Roving Squad and, therefore, that amount had to be deducted. The appeal was, thus, partly allowed. The assessees went up in second appeal to the Sales Tax Appellate Tribunal. The assessees explained before the Tribunal that it had not been practicable to maintain the day-to-day stock account in respect of the goods purchased from outside the State and locally, since the goods were identical. It was asserted that the appellate authority as well as t