Protective assessment requires a recorded factual basis; mere facilitation without business nexus cannot sustain jurisdiction.

Protective assessment under the Kerala Value Added Tax regime is sustainable only where the assessing authority records a rational, fact-based belief that the assessee was carrying on business in the name of, or in association with, another person, and that statutory ingredients are reflected in the assessment order itself. A mere facilitative act, such as introducing or identifying another person for registration, does not establish the required business nexus or jurisdictional foundation. The availability of an appellate remedy does not bar interference where the defect goes to the root of jurisdiction. On that basis, the assessment orders and consequential demand notices were held unsustainable.

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Issues: (i) Whether protective assessment under section 26 of the Kerala Value Added Tax Act, 2003 could be sustained in the absence of a specific finding that the petitioner was carrying on business in the name of, or in association with, another person; (ii) Whether the petitioner could be relegated to the statutory appellate remedy in the facts of the case.

Issue (i): Whether protective assessment under section 26 of the Kerala Value Added Tax Act, 2003 could be sustained in the absence of a specific finding that the petitioner was carrying on business in the name of, or in association with, another person.

Analysis: The provision authorises protective assessment only where the assessing authority has reason to believe that a person is or was carrying on business in the name of, or in association with, another person, directly or indirectly, in the specified capacities. The belief must rest on a rational basis and must be reflected in the assessment order itself. On the record, the notices and orders only showed that the petitioner, an Advocate, had introduced and identified another person for registration. There was no specific finding that she was connected with the business activity or that the statutory ingredients of section 26 were satisfied.

Conclusion: The protective assessment was unsustainable and the challenge succeeded on this issue.

Issue (ii): Whether the petitioner could be relegated to the statutory appellate remedy in the facts of the case.

Analysis: Though an alternative remedy was available, the defect went to the root of jurisdiction because the assessment was made without the statutory foundation required by section 26. In such circumstances, the existence of an appellate remedy did not bar interference.

Conclusion: The petitioner was not to be confined to the alternate remedy.

Final Conclusion: The assessment orders and consequential demand notices could not stand, and the appeal succeeded.

Ratio Decidendi: A protective assessment can be sustained only when the assessing authority records a rational, fact-based belief that the statutory ingredients are met, and a mere facilitative role without business involvement does not confer jurisdiction under section 26.

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