B.C. Varma, J.
1. The petitioner, a partnership firm has two partners. It was registered as a dealer under the M. P. General Sales Tax Act, 1958. After duly furnishing the returns for the period from 4th November, 1975, to 22nd October, 1976, stock return was also filed. After paying the sales tax on the turnover, the firm discontinued its business and its registration was cancelled. In order to initiate assessment proceedings, the Sales Tax Officer served a notice on the petitioner. This notice was actually served on one Harishankar, son of Ramswaroop, one of the partners of the petitioner-firm. By this notice, the petitioner was required to appear before the S. T. O. on 11th April, 1979. One of the partners is alleged to have appeared on that date but he was assigned no other date in the order sheet and was orally ordered to appear on 30th April, 1979. It appears that the assessment was completed on 11th April, 1979, and the assessment order was passed treating the petitioner ex parte. The gross turnover shown in returns filed by the petitioner were accepted but certain deductions claimed on account of sales to registered dealers were not allowed. The petitioner was served with demand notice on 20th May, 1979. On 18th June, 1979, the petitioner applied under Section 45-A of the Act for setting aside the ex parte assessment on the ground of want of service of notice of assessment proceedings on any of the partners or the agent of the petitioner-firm. This application was rejected by the S. T. O., vide its order (annexure E) as barred by time. A revision preferred before the Deputy Commissioner of Sales Tax has also been rejected, vide order dated 15th October, 1980 (annexure C). All these orders refusing to set aside the ex parte assessment are challenged by the petitioner by this petition under Article 226 of the Constitution.
2. Relying upon Rule 63 and Sub-rules (1), (7) and (10), of the M. P. General Sales Tax Rules, 1959, learned counsel for the petitioner submitted that the service of notice on Harishankar cannot be held to be good as Harishankar was neither the partner nor the agent of the partnership and therefore, the proceedings leading to assessment and the assessment made are entirely without jurisdiction. Learned counsel relied on a Full Bench decision of the Allahabad High Court reported in Laxmi Narain Anand Prakash v. Commissioner of Sales Tax  46 STC 71. It was also submitted that before finally proceeding to best judgment assessment, a notice ought to have been given to show cause against the rejection of the petitioner's claim for exemption of certain sales of declared goods.
3. We are of opinion that although the order rejecting the application under Section 45-A cannot be interfered with, the second contention has substance and must be accepted. It is true, as held by the Full Bench of the Allahabad High Court in Laxmi Narain Anand Prakash's case  46 STC 71, that absence of clue and proper service of notice to the initiation of assessment proceedings is without jurisdiction. In the present case, however, we notice that the return for the period under assessment itself was filed by Harishankar. Not only this, even earlier it is this Harishankar alone who had been acting before the sales tax authorities on behalf of the partner and was duly representing the firm. Under these circumstances, the S. T. O. committed no error in holding Harishankar as an 'agent' of the petitioner-firm within the meaning of the term as defined under explanation below Sub-rule (7) of Rule 63 of the M. P. General Sales Tax Rules, 1959. Service on Harishankar was, therefore, proper.
4. The petitioner claimed deduction of Rs. 3,26,988.55 for sale of declared goods sold on declaration in form XII. While making assessment, the S. T. 0. has disallowed this deduction for the purpose of assessment of sales tax. However, in the same order, while computing the turnover tax, this deduction has been allowed. The S. T. O. after rejecting the petitioner's claim for deduction of declared goods has proceeded to assess the sales tax to the best of his judgment under Section 18(4)(d) of the Act. It is obvious that while so doing no notice has been given to the petitioner as the order itself was passed on the date when the hearing was fixed. The order-sheets filed along with the return show that apart from the notice to initiate the proceedings no further notice was served upon the petitioner. It is true that it is not always necessary to give a subsequent opportunity to the assessee to show cause against the proposed best judgment assessment. It was however held by this Court in Commissioner of Sales Tax, M.P. v. Imphalsha Manufacturing Co., Indore  33 STC 263 that under certain circumstances the rules of natural justice may require the issuance of a notice before proceeding to the best judgment assessment. It was observed that such an opportunity need not be given at two stages but must be given in accordance with the principles of natural justice so that the assessee is not affected adversely without being heard. In the instant case, from the order of the S. T. 0. dated 11th April, 1979, it is apparent that for the purpose of turnover tax he has allowed the deduction claimed by the petitioner. If in spite of this, and in spite of accepting the figure of gross turnover as submitted by the petitioner, the S. T. O. felt that the same deduction was not allowable for any reason for the purpose of assessment of sales tax, the petitioner ought to have been noticed and should have been given an opportunity of being heard before the same item was rejected. It appears somewhat anomalous that in the same order for one purpose, namely, for purpose of turnover tax the deduction claimed by the assessee is allowed while for another purpose, namely, for assessment of sales tax the same is disallowed. We are of opinion that under these circumstances, the petitioner was entitled to a notice to show cause against the refusal to allow this deduction. It was pointed in State of Kerala v. C. Velukutty : 60ITR239(SC) that 'the limits of the power are implicit in the expression 'best of his judgment'. Judgment is a faculty to decide matters with wisdom truly and legally. Judgment does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though there is an element of guess-work in a 'best judgment assessment', it shall not be a wild one, but shall have a reasonable nexus to the available material and the circumstances of each case. Though Sub-section (2) of Section 12 of the Act provides for a summary method because of the default of the assessee, it does not enable the assessing authority to function capriciously without regard for the available material.' In Swamy Bros. v. Commissioner of Income-tax, Mysore and Travancore-Cochin : 34ITR123(Ker) , it was held that the material on which the officer intended to found his estimate must be disclosed to the assessee and the assessee must first be extended an opportunity to explain the position. We are of opinion that when the S. T. O. allowed the deduction claimed by the petitioner-assessee on one count-and proposed to disallow it on the second count (for the purpose of assessment of sales tax), the assessee ought to have been given an opportunity against that action. The order does not disclose the application of mind for not allowing the deduction for purpose of assessment of sales tax nor does it show how and on what basis the authority has proceeded to assess to the best of his judgment under Section 18(4)(d) of the Act. We are, therefore, of opinion that the assessment of sales tax cannot be upheld.
5. The petition is allowed. The impugned order of the S. T. O. dated 11th April, 1979, in so far as it relates to the assessment of sales tax, and the order of the Deputy Commissioner of Sales Tax dated 15th October, 1980, upholding that order are hereby set aside. The petitioner shall be given an opportunity of being heard and to show cause why the deduction claimed by him be not allowed. Under the circumstances of this particular case, we make no order as to costs. The security amount shall be refunded to the petitioner.