2014 (9) TMI 230 - HC - VAT and Sales Tax

Validity of order passed - single order passed for 4 assessment year - Held that - It is a settled law that each assessment year is a distinct proceeding, independent from each other. Type of transaction may vary between one assessment year and another assessment year. In fact, before passing the impugned assessment order, a single inspection was conducted. Pre-assessment is said to be made from 2009 onwards. Hence, the petitioner is entitled for separate pre-assessment notice. Thereafter, the petitioner should be given opportunity to submit his reply. Thereafter, the matter should be adjudicated and separate orders have to be passed - Since the said procedure has not been followed, on this technical ground alone, the writ petition is allowed and the impugned assessment order is set aside and the matter is remanded to the respondent for fresh consideration - Decided in favour of assessee.

Summary

Issues: Challenge to assessment order based on single order for multiple assessment years.

Analysis:
The judgment by the High Court addressed the challenge to an assessment order covering four assessment years due to a single pre-assessment notice and subsequent single order of assessment. The petitioner contended that separate assessment orders should have been passed for each year. The court emphasized the principle that each assessment year is a distinct proceeding, independent from others, with transactions varying between years. It was noted that a single inspection was conducted before the assessment order, starting from 2009. The court ruled that the petitioner was entitled to separate pre-assessment notices for each year, followed by an opportunity to respond and separate adjudication leading to distinct assessment orders.

The learned Additional Government Pleader argued that the petitioner had not maintained separate accounts for the four years in question. However, the court reiterated the importance of following due process for each assessment year, emphasizing the need for separate pre-assessment notices, responses, and adjudication. As the prescribed procedure had not been adhered to in this case, the court allowed the writ petition on technical grounds, setting aside the impugned assessment order and remanding the matter to the respondent for fresh consideration.

In the final ruling, the court directed the respondent to issue four separate pre-assessment notices for the four assessment years, granting the petitioner 15 days to submit explanations for each year. Following this, the respondent was instructed to conduct personal hearings and pass separate assessment orders for each year. The judgment highlighted the necessity of procedural fairness and adherence to distinct processes for each assessment year, ultimately ensuring a fair and just outcome for the petitioner.