2009 (4) TMI 855 - HC - VAT and Sales Tax

Reassessment proceedings under the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 challenged as without serving the order of assessment Held that -In view of the aforesaid analysis and the judgment of the Division Bench of this court in the matter of Smt. Jijeebai Shinde 1984 (9) TMI 13 - MADHYA PRADESH High Court , in the facts of the present case, we quash the reassessment initiated by the impugned notice dated December 29, 2000, by giving liberty to issue fresh notice of reassessment in accordance with law. The writ petition is allowed accordingly

Summary

Issues:
1. Initiation of reassessment proceedings without serving the order of assessment under the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994.

Analysis:
The petitioner challenged the initiation of reassessment proceedings without being served the order of assessment under the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994. The petitioner filed a return for the assessment period from April 1, 1995, to March 31, 1996. The assessing authority reserved the case for passing the final order of assessment. Subsequently, a notice was issued for reopening the assessment proceedings on the grounds of certain sales and purchases escaping assessment. The petitioner objected, stating that without being communicated the order of assessment, reassessment proceedings cannot be initiated. The objection was rejected, and the revision petition was also dismissed. The main issue was whether a notice of reassessment could be issued before serving the order of assessment.

In this case, the impugned notice of reassessment was issued to the petitioner before the order of assessment was served. The petitioner was required to appear and provide documents related to the alleged escaped assessment. However, the order of assessment was served much later. The court analyzed the relevant sections of the Act, particularly sections 27 and 28, which deal with assessment and reassessment. It was emphasized that the term "assessment is made" should be interpreted in a manner that ensures the assessee has received the order of assessment before initiating reassessment proceedings.

Additionally, the court referred to specific rules under the Madhya Pradesh Vanijyik Kar Niyam, 1995, which mandate the service of the assessment order before issuing a notice of reassessment. Citing a Supreme Court case and a previous Division Bench judgment, the court highlighted the importance of communication of the assessment order to the assessee before invoking reassessment provisions. Ultimately, the court quashed the reassessment initiated without serving the order of assessment, allowing for the issuance of a fresh notice of reassessment in compliance with the law.

In conclusion, the court's decision was in favor of the petitioner, emphasizing the necessity of serving the order of assessment before initiating reassessment proceedings. The judgment provided a detailed analysis of relevant legal provisions and precedents to support the quashing of the reassessment and the requirement for proper communication of assessment orders to the assessee.