Mandatory reassessment notice and opportunity to show cause are required before tax liability can be reassessed.

A reassessment under section 39 of the Karnataka Value Added Tax Act, 2003 cannot be sustained unless the prescribed authority first issues a reassessment notice and gives the dealer an opportunity to show cause in writing. Here, the order disclosed only a direction to produce books of account, with no notice under section 39 before reassessment was made. Because the mandatory statutory precondition was not met, the reassessment procedure also breached natural justice and fair procedure. The reassessment order was therefore set aside, and the matter was remanded for fresh reassessment in accordance with law.

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Issues: Whether a reassessment order under section 39 of the Karnataka Value Added Tax Act, 2003 could be sustained when no notice of reassessment and no opportunity to show cause were given to the dealer.

Analysis: Section 39 expressly requires the prescribed authority to issue a notice of reassessment to the dealer and to afford an opportunity of showing cause in writing before reassessing the tax liability. The reassessment order itself showed only a notice for production of books of account, but no notice under section 39 was issued before passing the reassessment order. The mandatory precondition for reassessment was therefore not complied with, and the procedure adopted violated the principles of natural justice and fair procedure.

Conclusion: The reassessment order could not be sustained and was set aside. The matter was remanded to the assessing officer for fresh reassessment in accordance with law.

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