Which one of these two sentences is written correctly?
- This test data seems to be not good.
- This test data seems to not be good.
Better yet if you could explain as to why the correct form is correct. It would be greatly appreciated.
The most natural is:
This test data doesn't seem to be good.
The following two, although not incorrect per se, are less common:
This test data seems to be not good.
This test data seems not to be good.
And the last one sounds rather unnatural:
This test data seems to not be good.
Ngrams confirms it:
I am afraid I can't explain the why part, so I'll leave it to other answers :)
If it fits the context, I recommend:
The test data seems [to be] no good.
According to Google Ngram Viewer, no good is more common than not good.
And when we add seems to be or seems (NGram), no is much more common.
However, only use no good if the data is of such poor quality that you can't use it. no good has a stronger meaning than not good.