Court quashes assessment orders due to improper service of notice

KR. Venkitaperumal Raja Versus Commissioner Of Agricultural Income-Tax And Another

KR. Venkitaperumal Raja Versus Commissioner Of Agricultural Income-Tax And Another - [1992] 193 ITR 213 Issues:
Validity of service of notice before best judgment assessment under section 18(4) of the Agricultural Income-tax Act.

Analysis:
The petitioner/appellant challenged the assessment orders passed by the respondents, arguing that there was no valid service of notice before the best judgment assessment was conducted under section 18(4) of the Agricultural Income-tax Act. The appellant contended that the registered notice sent by post was not served on him, as evidenced by the postal endorsement "not found." The assessing authority claimed that the notice was validly served as per section 64(1)(c) of the Act. The central question was whether there was sufficient service of notice before the assessment under section 18(4) of the Act.

The court examined the provisions of section 64(1) of the Kerala Agricultural Income-tax Act, which outlines the manner of serving notice. It provides for service by registered post if the person cannot be found. The court referred to legal principles stating that if a letter properly directed is sent by registered post, it is presumed to have reached its destination. However, the legal fiction of deemed service can be rebutted if the addressee was not found, as in this case where the notice was returned with the endorsement "not found."

The court emphasized that the legal fiction of deemed service through registered post should be limited to its intended purpose and not extended beyond. It cited previous judgments to support the notion that the presumption of service through registered post can be rebutted if the letter is returned undelivered with specific reasons such as the addressee not being found. In this case, the court found that the postal endorsement "not found" rebutted the presumption of valid service under section 64(1)(c) of the Act.

Consequently, the court held that the assessment orders were illegal and quashed them. The second respondent was given the opportunity to proceed with the assessment by serving a fresh pre-assessment notice on the appellant in accordance with the law. The writ appeal was allowed based on the insufficiency of notice service before the assessment under section 18(4) of the Agricultural Income-tax Act.