G.K. Misra, C.J.
1. The questions referred to this court by the Tribunal under Section 24(1) of the Orissa Sales Tax Act are as follows:
(A) Whether on the facts and circumstances of the case the Tribunal is justified in making an estimate of suppression beyond what was alleged to have been actually found by the officers of the department that is Rs. 14,11,354.67 for all the quarters from 31st March, 1960 to 31st March, 1962.
(B) Whether the conclusion arrived at by the Tribunal is inconsistent with his finding in second appeal and, if so, is it liable to be set aside.
2. The facts relevant to these questions may be stated in short. The petitioner is the owner of a rice mill at Jaleswar in the district of Balasore. The sales tax department raided the business premises of the petitioner and seized certain secreted accounts. It was found from those accounts that the suppression during the relevant nine quarters ending 31st March, 1960 to 31st March, 1962, amounted to Rs. 14,11,354.67. The Sales Tax Officer held that the suppressions were not exhaustive and accordingly assessed the petitioner to the tune of Rs. 50,00,000 for every year. The Assistant Commissioner of Sales Tax reduced the same to Rs. 84,15,000 for the entire period. The Sales Tax Tribunal reduced the same for the entire period to Rs. 27,00,000.
3. In its appellate judgment the Tribunal held that the secreted accounts seized from the business premises of the petitioner were exhaustive as the entire premises were raided and all the papers were seized. Though it came to such a conclusion, it was of opinion that the ends of justice will be met if the estimate of suppression was made at Rs. 3,00,000 in respect of each quarter.
4. Mr. Ray on behalf of the petitioner contends that once the department was in possession of the entire secreted accounts which were genuine, correct and exhaustive there was no scope for making further estimates beyond what was found from those accounts. In other words, the secreted accounts were the genuine accounts and once they were before the taxing authorities no further estimate was to be made merely on guess. The contention is well founded and must be accepted.
5. The petitioner kept two sets of accounts : (i) which was publicly kept showed an underestimate of business transactions and profits and (ii) a genuine account was kept to reflect the true transactions. Once the genuine accounts were available and the finding is that there were no other accounts and the secreted accounts were exhaustive, there was no scope for making a further estimate of the suppressions de hors the genuine accounts seized. Law is now well settled that estimate of suppression must bear a reasonable nexus to the materials available. Merely because a dealer or assessee is found to have made certain suppressions the assessment cannot be raised to any extent as a punitive measure. The first case on the point is Raghubar Mandal Harihar Mandal v. The State of Bihar  8 S.T.C. 770 (S.C.). wherein the Supreme Court gave a clear exposition of the law. In State of Kerala v. C. Velukutty  17 S.T.C. 465 (S.C.), the position has been reaffirmed. At page 470 their Lordships observed thus :
Under Section 12(2)(b) of the Act, power is conferred on the assessing authority in the circumstances mentioned thereunder to assess the dealer to the best of his judgment. 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.
6. From the aforesaid analysis we are clearly of opinion that the learned Tribunal acted contrary to law in making an enhanced estimate of the suppressions by raising it to Rs. 27,00,000 from Rs. 14,11,354.67. We would accordingly answer question No. (A) in the negative and question No. (B) in the positive.
7. In the result, the references are accepted; but in the circumstances without costs. Reference fees be refunded.
S. Acharya, J.