2007 (1) TMI 515 - HC - VAT and Sales Tax

Summary

Issues:
1. Limitation period for assessment order
2. Compliance with rule 63(a), (b), and (c) before affixture of notice

Issue 1: Limitation period for assessment order
The assessee, a registered dealer, closed business in September 1997 and promptly informed the assessing authority. The assessing authority, after finding discrepancies in the accounts, proposed a best judgment assessment. The final assessment order was dated March 18, 2000, but the assessee claimed it was not communicated within the statutory period. Despite objections and appeals, the assessment order was only received by the assessee in October 2000. The Tribunal directed the assessing authority to examine compliance with rule 63 before affixing the notice. The subsequent assessment order in 2003 failed to address this issue. The High Court, citing precedent, held that without proof of attempting service through prescribed methods under rule 63(a), (b), and (c), mere affixture of notice is insufficient. As the original assessment order was not communicated within the limitation period, the court found it barred by limitation.

Issue 2: Compliance with rule 63(a), (b), and (c) before affixture of notice
The Tribunal's direction to the assessing authority was to ensure compliance with rule 63 before affixing the notice. The High Court observed that there was no evidence that the assessing authority followed the prescribed methods under rule 63(a), (b), and (c). Citing a previous judgment, the court emphasized the necessity of proper service through the prescribed modes before resorting to affixture. The court found that in the absence of proof that the prescribed methods were impracticable, affixture alone does not constitute proper service. The court noted that the assessing authority did not address this crucial issue in the subsequent assessment order of 2003. Consequently, the court held that the assessment order was not valid due to the lack of compliance with rule 63 and the limitation period for communication of the order had expired.

In conclusion, the High Court allowed the revision petition, holding the assessment order null and void due to being barred by limitation and lack of compliance with rule 63(a), (b), and (c) before the affixture of the notice. The court found in favor of the assessee, emphasizing the importance of following statutory procedures and timelines in assessment proceedings.