2021 (3) TMI 1394 - HC - VAT and Sales Tax

Reopening of the assessment for the period 1st April, 2006 to 31st March, 2011 - Orissa Entry Tax Act - case reopened due to receipt of objection raised by the A.G., Odisha, Bhubaneswar - HELD THAT - An order reopening the assessment must reflect the reasons for such reopening in the body of the order itself. The reasons cannot be supplied later. If the reason is simply due to the objection raised by the A.G., Odisha , it must state what the nature of such objection was. Only then will the assessee be in a position to answer the notice issued effectively. Since this basic principle has not been adhered to, the Court sets aside the impugned order reopening the assessment. Petition allowed.

Summary

Issues: Reopening of assessment under the Orissa Entry Tax Act for the period 1st April, 2006 to 31st March, 2011.

Analysis:
1. The primary issue in this case pertains to the challenge against the reopening of assessment under the Orissa Entry Tax Act for a specific period. The Assessing Officer decided to reopen the assessment based on an objection raised by the A.G., Odisha, Bhubaneswar. However, the key contention raised was the lack of clarity regarding the nature of the objection in the reopening order. The Form E-32(A-3) and order-sheet did not provide details of the objection, which is crucial for the assessee to effectively respond to the notice.

2. The Court emphasized the importance of clearly stating the reasons for reopening an assessment within the order itself. It was highlighted that the reasons cannot be provided at a later stage as the assessee must have a complete understanding of the grounds for reopening to respond adequately. In this case, since the reason cited was solely the objection from the A.G., Odisha, without specifying its nature, the Court deemed the order reopening the assessment as insufficient and set it aside.

3. The Court's decision to set aside the impugned order was based on the fundamental principle that the reasons for reopening an assessment must be explicitly mentioned in the order to enable the assessee to prepare a suitable response. By failing to adhere to this principle and provide clarity on the nature of the objection from the A.G., Odisha, the Assessing Officer's decision to reopen the assessment was deemed invalid. Consequently, the petition challenging the reopening was allowed, with no costs imposed on either party.

In conclusion, the judgment highlights the significance of articulating clear and specific reasons for reopening an assessment within the order itself to ensure fairness and transparency in the assessment process. The case serves as a reminder of the procedural requirements that must be met to safeguard the rights of the assessee during assessment proceedings under the Orissa Entry Tax Act.