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Shamon K.S. Versus State of Kerala & Ors.

2015 (11) TMI 1142 - KERALA HIGH COURT

Validity of assessment order - Violation of principle of natural justice - Best judgment assessment - Held that:- a mere perusal of order would indicate that after serving a notice to the petitioner, intimating him of the proposal to complete the assessment for the assessment year on best judgment basis, the respondent assessing authority proceeded to pass orders on the very next day, thereby rendering the very purpose of the notice meaningless. Ext. P4 order is vitiated by a non-compliance with .....

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the Petitioner : Adv. Sri.L.Rajesh Narayan For the Respondent : Government Pleader Sri.Liju V.Stephen ORDER The challenge in the writ petition is against Ext.P4 order of assessment that finalises an assessment in relation to the petitioner under the KVAT Act, for the period from 01.08.2015 to 03.09.2015, on best judgment basis. The main contention of the petitioner in the writ petition is that Ext.P4 order was passed without affording the petitioner an effective opportunity of showing cause agai .....

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t this court, while exercising its discretionary powers under Art.226 of the Constitution of India, can tell an assessee off at the gates, asking him to avail the alternate remedy under the respective statute. Frighteningly frequent are those cases where the assessments are completed mechanically, and without considering the objections put forth by the assessee, that the time has now come for this Court to, once again, sound a note of caution to the tax administration in the State. 4. Under the .....

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st judgement basis. As the phrase itself would signify, an assessment on "best judgment basis" is to be resorted to only when all attempts, at finalising an assessment based on available material, fail. This is the scheme envisaged for completion of assessments under the KVAT Act and Rules, as is evident from a reading of Sections 21, 22, 24 and 25 of the KVAT Act read with Rules 34, 35 and 38 of the KVAT Rules. 5. A reading of the aforementioned statutory provisions would indicate tha .....

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documents sought for are not produced, the revenue authority is expected to issue a fresh notice to the dealer intimating him of his decision to proceed with a best judgment assessment under S. 25 of the KVAT Act. This latter notice is essentially in the nature of a show cause notice, asking the dealer to show cause as to why the assessment should not be completed on best judgment basis. For the opportunity provided to the dealer to be reasonable and meaningful, the time granted to the dealer m .....

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otwithstanding the decision of this Court in Suzion Infrastructure Service Ltd. v. Commerial Tax Officer (W.C), Ernakulam [2010 (3) KHC 299] where the practice of revenue authorities, in issuing a composite notice calling for fresh returns/documents/accounts as well as for the hearing in connection with the best judgment assessment that is proposed, was deprecated, the revenue authorities continue to follow such an unfair and arbitrary procedure while completing assessments on best judgment basi .....

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