2012 (11) TMI 292 - HC - VAT and Sales Tax

Reopening of Assessment under section 17D of the Kerala General Sales Tax Act complaint of petitioner was that the assessment was completed without affording him adequate opportunity to file his objections or giving him an opportunity of hearing Held that - When a person complains that principles of natural justice has been violated it is also incumbent on the part of the said person to show that by such violation prejudice has been caused. Section 17D(2)(d) of the KGST Act, 1963, permits reopening of assessment completed provided fresh materials pertaining to tax have been received. Section also contemplates that such reopening shall be only with the prior permission of the Commissioner - this is a case where fresh materials were received justifying reopening as contemplated under section 17D(2)(d) of the KGST Act. In such situation the petitioner cannot complain that any prejudice has been caused to him - re-opening also should be conducted in the manner as in section 17D

Summary

Issues Involved:
Assessment under Kerala General Sales Tax Act, reopening of assessment, violation of principles of natural justice, permission for reopening assessment, fresh materials for reopening assessment, completion of assessment in terms of section 17D.

Assessment under Kerala General Sales Tax Act:
The assessment for the petitioner under the Kerala General Sales Tax Act for the assessment year 2008-09 was completed initially. Subsequently, a notice to reopen the assessment was issued based on an order granting permission by the Commissioner of Commercial Taxes. The petitioner challenged the initial assessment order in a writ petition, claiming lack of opportunity to file objections or be heard. The court allowed the petitioner to file objections and directed for fresh assessment orders to be passed after affording an opportunity of being heard.

Violation of Principles of Natural Justice:
The petitioner raised concerns about the reopening of assessment without proper notice or hearing. The petitioner also argued that the Commissioner could not have authorized the assessing authority to reopen the assessment since it was conducted by a team under section 17D. The court considered the submissions made and noted that the petitioner did not challenge the Commissioner's order when filing the initial writ petition, thereby limiting the scope of raising the issue later.

Permission for Reopening Assessment and Fresh Materials:
The court analyzed the provisions of section 17D(2)(d) of the KGST Act, which allow reopening of assessments with fresh materials and prior permission of the Commissioner. The court found that the reason for granting permission in this case was the imposition of a penalty that was not considered during the initial assessment. Since fresh materials justified the reopening, the petitioner could not claim prejudice. However, the court directed that the reopening of the assessment should follow the procedure outlined in section 17D.

Completion of Assessment in Terms of Section 17D:
The court rejected the challenge against the order granting permission for reopening but directed that the subsequent assessment should be completed in accordance with the provisions of section 17D. The court emphasized the importance of following the prescribed procedure for reopening assessments conducted under section 17D to ensure fairness and compliance with the law.

In conclusion, the writ petition was disposed of with the direction to complete the reopening of the assessment in line with the requirements of section 17D of the Kerala General Sales Tax Act.