Failure to Issue Notice by VAT Dept before completion of Assessment Order: Calcutta HC Directs Denovo Proceedings [Read Order]

The Calcutta High Court, in its recent case, directs denovo proceedings under the Value Added Tax Act, 2005, as the department failed to issue notice before completion of the final assessment order.

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Jharna Saha , the petitioner, challenged  the order passed by the West Bengal Taxation Tribunal in an application filed by the writ petitioner being RN-81/2024 dated 7th March, 2025. At the first blush the court was bit curious to find as to why the petitioner has challenged the order passed by the tribunal as the tribunal has accepted the case of the petitioner and held that no notice was served on the petitioner before the assessment proceeding was completed but in the last paragraph of the impugned order the  tribunal has directed the Assessing Officer to initiate a fresh proceeding after sending fresh notice and complete the assessment within a period of six months.

The order and direction issued by the  tribunal is not legally tenable in the light of the relevant statutory provision under the West Bengal Value Added Tax Act. Section 46(1) of the said Act read with Rule 56(1)(2) states that the authority shall proceed to assess only after service of mandatory notice in Form-25 allowing a prescribed minimum time to the assessee to comply with prescribed requirements.

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Without service no jurisdiction to assess may be lawfully assumed. This condition has not been satisfied in the instant case on hand, the assessment becomes non est in the eye of law. However, this aspect has been lost sight of the  tribunal and the  tribunal has in effect granted a second lease of life to the department to initiate fresh assessment proceeding beyond the period of limitation. Therefore, to that extent the order of the learned tribunal calls for interference.

A division bench of Chief Justice T.S. Sivagnanam and Chaitali Chatterjee (Das)  allowed the writ petition and the judgment passed by the  tribunal dated 7th March, 2025, to the extent it remands the matter to the appropriate assessing authority and direct de novo assessment proceeding for the period 2009-10 is quashed.

To Read the full text of the Order CLICK HERE

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