P.N.Krishnakumar vs. The Agrl.Income Tax And State Tax Officer

Facts

The petitioner, P.N. Krishnakumar, a furniture trader, had his registration cancelled by the 1st respondent in 2015 after he informed the department of closing his business. The respondents initiated proceedings to assess the petitioner for the tax periods 2011-2012 and 2012-2013, issuing notices to both his business and residential addresses. As the petitioner did not respond, the assessing authority passed assessment orders (Exts.P3 and P3(a)). The petitioner filed a writ petition challenging these orders, contending he never received any notice at his business address, which was closed, and that the postal endorsements for his residential address did not constitute due service.

Held

The Court held that the assessment orders (Exts.P3 and P3(a)) were passed in violation of the principles of natural justice. The Court noted that the petitioner had admittedly closed his business in 2015, making any notice sent to the business address purposeless. Furthermore, the postal endorsements for the petitioner's residential address, "not known" and "abolished," did not constitute due service, as they did not indicate that intimation was left with the addressee or that the addressee failed to make efforts to get the notice served. The Court found that these endorsements did not suggest any deemed service. Consequently, the Court set aside the impugned orders and remanded the matter for fresh adjudication. The petitioner was directed to appear before the authority on March 1, 2019, for further proceedings.

Key Issues

1. Whether the assessment orders (Exts.P3 and P3(a)) passed by the respondent authorities are vitiated by a violation of the principles of natural justice due to non-service of notice on the petitioner, particularly concerning Section 12 of the Kerala Value Added Tax Act, 2003 (KVAT Act) and the principles of natural justice? The petitioner argued that he had closed his business in 2015 and informed the department, rendering any notice to the business address futile. He further contended that the postal endorsements for his residential address, such as "not known" and "abolished," did not amount to due service, violating the principles of natural justice. The revenue (respondents) argued that once notice is sent to the last known address and it is found to be correct, the department's role ceases, implying due service and no legal infirmity in the assessment orders.