Bishambhar Dayal, C.J.
1. This is a petition by a firm which has been assessed under Section 18(6) of the M. P. General Sales Tax Act by a best judgment assessment for the three quarters from 25th October, 1965, to 16th August, 1966. The assessing officer served a notice dated 22nd August, 1966, on the assessee. The notice was served on the assessee on 9th November, 1966, directing him to produce his accounts on 23rd November, 1966. On that date the petitioner did not appear. His counsel had sent an application for postponement of the date. But the assessing officer did not take notice of that application as it had not been filed by a properly authorized agent. He accordingly fixed the case for ex parte assessment on the next day. On 24th November, 1966, a best judgment assessment order was passed by him by which he estimated the total sales at Rs. 3,60,000. Out of this, an amount of Rs. 1,20,000 was deducted on account of inter-State sales and the balance was divided into three portions--Rs. 60,000 to be assessed at 7 per cent., Rs. 60,000 at 2 per cent. and Rs. 1,20,000 at 1 per cent. Accordingly, he assessed a sum of Rs. 6,600 as tax payable. He also imposed a penalty of Rs. 1,000 on the petitioner for not having filed the returns. In this assessment order, the only basis on which the estimate is said to have been done is the previous year's assessment.
2. The petitioner has filed a copy of the previous year's assessment which indicates that the total turnover had been assessed at Rs. 4,03,247. Out of this, a sum of Rs. 52,326 was found out as liable to payment of tax. This was then divided into four portions: an amount of Rs. 16,122 was assessed at 1 per cent., Rs. 28,546 was assessed at 2 per cent., Rs. 1,000 was assessed at 5 per cent., and Rs. 5,758 was assessed at 7 per cent. In this way, a total tax of Rs. 1,230.20 was imposed upon the petitioner. If this had been the basis for the best judgment assessment in the impugned order, the assessment would have been very different from what has been done by the assessing officer. He does not say a word in the assessment order that he made any enquiry from which he came to the conclusion that the sales of the petitioner had considerably increased over those which were in the previous year. He also does not indicate as to how he has divided the turnover into the amount which was not taxable on account of being the turnover of inter-State sales; nor does he indicate on what basis he has divided the balance for assessing the tax at 7 per cent., 2 per cent. and 1 per cent. It, therefore, appears that the assessment made lay the assessing officer was entirely an imaginary assessment and not a best judgment assessment. There seems to have been no basis on which the assessment was made.
3. The assessee filed a revision against the order and one of the grounds taken in the revision, as stated by the Divisional Deputy Commissioner of Sales Tax, himself was :
That the assessing officer had not made proper enquiry into the business of the dealer.
The revising officer disposed of this contention by merely saying in paragraph 12 of his order that:
The Sales Tax Officer has very clearly stated in his order that he has relied upon the assessment, case of the petitioner for the previous year. Nothing could be a better guide or yardstick for this purpose.
We are unable to see how the record of the previous year was taken as a yardstick for the present assessment order or how that assessment could be a substitute for information regarding the increase in assessment by the impugned order. The matter has been most carelessly dealt with by the sales tax authorities. It has been repeatedly said that even a best judgment assessment must be a bona fide assessment and must be based on some material which could reasonably lead to the conclusion arrived at.
4. The assessment order as well as the order in revision are accordingly quashed. The sales tax authorities may however proceed according to law. There will be no order as to costs. The outstanding amount of the security deposit shall be refunded to the petitioner.