2015 (5) TMI 380 - HC - VAT and Sales Tax

Reassessment proceedings - Violation of principle of natural justice - No fresh notice issued - Held that - after remand order was passed for fresh assessment by the Assessing Authority, the appellant had been given full opportunity to produce the books of account as well as the other evidences, as had been directed by the Tribunal. This being a case of reassessment after remand, cannot be said to be a matter relating to original assessment where notice under Section 39(1) of the Act was required to be given. It is not denied that at the time of original assessment, such notice under Section 39(1) of the Act had been given to the appellant - Where reassessment has been directed under orders of the Tribunal, permitting the appellant to produce books of account and other evidence, which has been complied with. In our view, no fresh notice under Section 39(1) of the Act, was required to be given after the remand - there is no violation of the principles of natural justice. We are also of the opinion that while holding that the books of account produced by the appellant were not to be accepted, the Assessing Authority was not obliged to give any notice to the assessee. As such, no interference is called for with the order of the learned Single Judge. - Decided against assessee.

Summary

Issues:
Assessment order challenge, Fresh assessment proceedings, Notice under Section 39(1) of the Act, Violation of principles of natural justice, Reassessment after remand, Requirement of notice prior to rejecting books of account, Compliance with Tribunal's directions, Appellate jurisdiction under KVAT Act, Interference with the order of the learned Single Judge.

Assessment Order Challenge:
The appellant, an assessee under the Karnataka Value Added Tax Act, challenged assessment orders for various tax periods. Appeals were filed and subsequently allowed by the Karnataka Appellate Tribunal, remanding the matter for fresh consideration. Fresh assessment proceedings were conducted, leading to a new assessment order dated 04.06.2014. Writ petitions were filed challenging this order on the grounds of lack of a fresh notice under Section 39(1) of the Act.

Notice under Section 39(1) of the Act:
The appellant contended that the absence of a fresh notice under Section 39(1) of the Act before passing the fresh assessment order violated the principles of natural justice. However, it was argued that since the appellant had been given ample opportunity to produce books of account and evidence as directed by the Tribunal, no new notice was required for reassessment after remand. The Tribunal's directions were complied with, and the original notice under Section 39(1) had been issued during the initial assessment.

Violation of Principles of Natural Justice:
The appellant claimed a violation of natural justice due to the lack of a notice before rejecting the books of account. The Court held that the purpose of the notice under Section 39(1) was to allow the assessee to present its case, which had been done during the original assessment. In this reassessment scenario, where the Tribunal directed a fresh opportunity for evidence production, no additional notice was deemed necessary.

Reassessment after Remand:
The Court emphasized that the reassessment was conducted as per the Tribunal's orders, granting the appellant the chance to present evidence. It was clarified that this was not a case of non-compliance with the Tribunal's directions regarding evidence production. The Court agreed with the learned Single Judge's decision to dismiss the writ petitions, maintaining that the appellant could appeal before the Appellate Authority if dissatisfied.

Interference with the Order of the Learned Single Judge:
Ultimately, the Court dismissed the appeals, reinforcing that no fresh notice under Section 39(1) was required post-remand for reassessment. It was concluded that there was no violation of natural justice, and the Assessing Authority was not obligated to issue a notice before rejecting the books of account. The Court upheld the decision of the learned Single Judge, emphasizing the appellant's right to appeal under the KVAT Act. The office was directed to return certified copies of annexures, and the filing of writ petitions and appeals was to be noted by the Appellate Authority for any future appeals with delay condonation applications.