2009 (5) TMI 807 - AT - VAT and Sales Tax

Summary

Issues:
Challenge to ex parte assessment order, validity of demand notice, dismissal of appeal on grounds of delay, revisional order on limitation, failure of authorities to consider returns, best-judgment assessment basis.

Ex Parte Assessment Order:
The petitioner challenged an ex parte assessment order dated December 26, 1986, passed by the Commercial Tax Officer for the period ending on December 31, 1982. The assessing authority proceeded ex parte due to the petitioner's non-appearance and made assessments based on best judgment as quarterly returns were not submitted. However, the petitioner provided evidence of filing returns before the assessment order was passed, indicating an error by the assessing authority in assuming no returns were filed. The order lacked a clear basis for the best-judgment assessment, which should not be arbitrary or whimsical but grounded in past records.

Validity of Demand Notice:
The petitioner received a demand notice without the required 30 days to pay assessed tax. The argument that the notice was void due to this deficiency was rejected, with the Tribunal holding that the notice was valid, and dealers could legitimately claim the statutory 30-day period from receipt of the notice to pay dues.

Dismissal of Appeal on Grounds of Delay:
The appellate authority dismissed the appeal after nine years, citing long delay and the absence of the original demand notice with the appeal memo. The dismissal on procedural grounds without considering the merits was noted, indicating a failure to address the case substantively.

Revisional Order on Limitation:
The Board confirmed the dismissal of the appeal based on limitation, questioning the reason for the nine-year delay. However, it was highlighted that an erroneous but genuine impression could lead to such delays, which the Board failed to fully appreciate. The petitioner's plea regarding the defective demand notice affecting the limitation period was not adequately considered.

Failure to Consider Returns and Best-Judgment Assessment Basis:
The assessing authority failed to consider the returns filed by the petitioner, leading to a failure in performing a statutory duty and causing prejudice. Moreover, the best-judgment assessment lacked a clear basis and indication in the order, emphasizing the importance of grounding such assessments in past records and not being arbitrary.

Judgment and Directions:
The Tribunal set aside the revisional order, the appellate order, and the assessment order, directing the assessing authority to conduct a fresh assessment proceeding. The petitioner was granted the opportunity to produce necessary records, and the authority was instructed to hear the proceeding by a specified date. The judgment emphasized the importance of diligently performing duties and ensuring a valid basis for assessments, highlighting the need for fairness and adherence to procedures in tax matters.