Court quashes orders, directs reassessment in line with law. Maintainable petition due to procedural violations.

The court quashed the impugned orders and directed authorities to reassess the petitioner in accordance with the law, emphasizing the importance of following proper procedures. The petition was deemed maintainable due to violations of natural justice and established legal principles, leading to the court's decision to set aside the orders dated 24.12.2011 without imposing any costs.

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Issues Involved:
1. Jurisdiction and power of the authority to pass the order.
2. Basis and validity of the findings of the authority.
3. Violation of principles of natural justice.
4. Period of limitation for assessment.
5. Maintainability of the writ petition due to availability of alternative remedy.

Issue-wise Detailed Analysis:

1. Jurisdiction and Power of the Authority to Pass the Order:
The petitioner contended that the authority lacked the jurisdiction and power to pass the impugned orders as they were beyond the period of limitation, and the government had no power to extend the period. The court rejected this argument, stating that the assessment was for a block period under Section 55-A of the VAT Act, introduced by Act No.26/2007. The block period comprises six years preceding the year of requisition or inspection, and the government had the power to extend the limitation period via notification dated 6.4.2011.

2. Basis and Validity of the Findings of the Authority:
The findings of the authority were based on the enquiry report of the Anti Evasion Bureau and the assessment of the Income Tax Department. The authority relied on bank statements and other documents without independent verification. The court found this approach to be perverse and against the law, emphasizing that the authority must independently assess the contents and not solely rely on external reports.

3. Violation of Principles of Natural Justice:
The petitioner argued that there was a violation of natural justice as they were not allowed to cross-examine the transport agents whose statements were used against them. The court upheld this argument, citing the Supreme Court's ruling that the burden of proof in tax evasion cases lies with the state, and the assessee must be given the opportunity to cross-examine witnesses to prove the correctness of their returns.

4. Period of Limitation for Assessment:
The court clarified that the assessment was for a block period and was within the limitation period as per Section 55-A of the VAT Act. The government had the authority to extend the limitation period, which was done before the period expired.

5. Maintainability of the Writ Petition Due to Availability of Alternative Remedy:
The court addressed the preliminary objection regarding the maintainability of the petition due to the availability of an alternative remedy. It held that the writ petition was maintainable as there was a violation of natural justice and the proceedings were against well-settled legal principles. The court cited the Supreme Court's judgment in Harbanslal Sahnia v. Indian Oil Corpn. Ltd., which allows writ jurisdiction in cases of violation of fundamental rights, failure of natural justice, or proceedings without jurisdiction.

Conclusion:
The court quashed the impugned orders dated 24.12.2011 (Annexures P/1 & P/2) and directed the authorities to reassess the petitioner in accordance with the law, following proper procedures. The petition was disposed of with no order as to costs.

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