2009 (1) TMI 797 - HC - VAT and Sales Tax

Summary

Issues:

1. Challenge to assessment order and demand notice under Kerala General Sales Tax Act, 1963.
2. Lack of pre-assessment notice.
3. Violation of circular regarding assessment team signatures.

Analysis:

1. The petitioner challenged the assessment order and demand notice issued under the Kerala General Sales Tax Act, 1963, by the fast track team. The main contention was the absence of a pre-assessment notice, as mandated by a previous judgment. The petitioner argued that the assessment was completed without issuing the required notice, leading to discrepancies in the tax rate applied. The respondent, in a counter-affidavit, disputed the higher tax rate applied and objected to the levy at 5.6% instead of the correct rate of 2.2%.

2. The court, considering the pleadings and the circular issued, found that the petitioner should have been given a pre-assessment notice as per the previous judgment and circular guidelines. The circular specified that while the assessment order should be signed by all team members, the pre-assessment notice could be signed by any member on behalf of the team. It was noted that the assessment order in question was signed only by one person, which was a clear violation of the circular. Therefore, the court concluded that the absence of a pre-assessment notice warranted the writ petition to be allowed.

3. Consequently, the court allowed the writ petition, quashed the assessment order and demand notice, and directed the matter to be re-done in compliance with the law within two months from the date of the judgment. The decision was based on the violation of the circular guidelines regarding team signatures and the failure to issue a pre-assessment notice, emphasizing the importance of procedural fairness in tax assessments under the Kerala General Sales Tax Act, 1963.