A R S Enterprises vs. The Assistant Commissioner Of Commercial Taxes

Held

The Court held that the impugned reassessment order and demand notice were liable to be set aside. The Court found merit in the petitioner's contention that their reply dated 27.11.2018 to the proposition notice dated 20.11.2018 had not been considered by the Assessing Officer in the impugned order. Furthermore, the Court noted that the notice dated 18.05.2020, which was referred to in the assessment order, was not duly served upon the petitioner, having been returned with the endorsement "addressee not found." In light of these procedural lapses and the petitioner's assertion that they could substantiate their claims if granted an opportunity, the Court concluded that the principles of natural justice were violated. Consequently, the Court decided to set aside the impugned order and demand notice and remitted the matter back to the Assessing Officer for fresh reconsideration. The petitioner was granted liberty to produce additional objections and documents, and a personal hearing was to be provided. The petitioner undertook to appear before the Assessing Officer on 18.01.2022.

Facts

The petitioner, A.R.S. Enterprises, sought to quash an ex-parte reassessment order dated 30.09.2020 and a consequential demand notice dated 29.09.2020, both issued by the Assistant Commissioner of Commercial Taxes (Audit), the first respondent. These orders pertained to the assessment period 2015-16. The petitioner argued that despite submitting a reply to a proposition notice on 27.11.2018, it was neither considered nor adverted to in the impugned order. Furthermore, the petitioner claimed they did not receive personal hearing and that notices dated 03.02.2020, 23.03.2020, and 18.05.2020 were not duly served, returning as "addressee not found." The petitioner requested the matter be remitted for reconsideration with an opportunity to submit objections and documents.

Key Issues

1. Whether the impugned reassessment order and demand notice are liable to be quashed on the grounds that the petitioner's reply to the proposition notice was not considered and that principles of natural justice were violated due to lack of personal hearing and non-service of subsequent notices? (Question of law and mixed fact and law) Petitioner's contentions: The petitioner contended that the ex-parte reassessment order and demand notice were passed in violation of the principles of natural justice. They argued that their reply dated 27.11.2018 to the proposition notice dated 20.11.2018 was not considered by the respondent. Additionally, they asserted that they did not receive personal hearing and that subsequent notices were not duly served, as evidenced by the endorsement "addressee not found." They sought a remand for reconsideration with an opportunity to present their case. Respondents' contentions: The respondents argued that the petition had no merit and was liable to be dismissed.