2017 (6) TMI 789 - HC - VAT and Sales Tax

Non-Service of notice before completion of assessment proceedings - natural justice - Held that - notice issued to the appellant in the business address was only supplementary, since a proper notice was issued in the residential address of the managing partner i.e. Abdul Azeez as well. Copy of the acknowledgment card is placed before this Court for perusal - On a perusal of the said document, it is seen that notice sent by registered post to the addressee i.e Managing Partner of the appellant was returned unclaimed - the case of appellant with reference to non-service of notice to be set aside - appeal dismissed - decided against appellant,

Summary

Issues Involved:
Challenge against interference declined by the learned single Judge with respect to setting aside assessment orders due to alleged non-service of pre-assessment notices, cancellation of registration, and completion of assessment without proper notice.

Analysis:
The appellant, a partnership firm engaged in manufacturing and trading, had its establishment closed down, which was communicated to the authorities via email resulting in the cancellation of registration. Despite this, assessments were proposed for certain financial years, alleging escaped turnover. The appellant claimed that the pre-assessment notices were never served, leading to a challenge of the assessment orders (Exts. P2 and P2(a)).

Before the learned single Judge, it was noted that mere intimation of business cessation via email was insufficient. Proper procedures under the law, specifically under sub rule (27) of Rule 17 of the KVAT Rules, should have been followed. The single Judge dismissed the writ petition, stating the petitioner was not entitled to relief but allowed statutory remedy. This decision was challenged in the appeal.

During the appeal hearing, the appellant's counsel reiterated that the business closure was known to the authorities, and notices should have been issued to the partners' residential addresses. The Government Pleader informed the court that a notice was sent to the managing partner's residential address, but it was returned unclaimed. The court held that the appellant's claim of non-service of notice was not valid. However, the appellant was advised to pursue statutory remedies for liability quantification and other aspects as reserved by the single Judge. The appeal was dismissed, upholding the assessment orders.

In conclusion, the court found that the appellant's argument regarding non-service of notice before assessment proceedings completion was not acceptable. The appellant was allowed to pursue statutory remedies for other aspects, but the appeal challenging the assessment orders was dismissed.