Quasi-judicial tax assessment cannot be predetermined by circulars, and a notice inviting objections is not a final order.

An administrative circular cannot bind a quasi-judicial assessing authority to treat mobile phones and cell phones as unclassified goods taxable at a higher rate without statutory sanction, so the circular was quashed. Where the impugned proceedings dated 06.11.2014 invited objections and required a response before any reasoned determination, they were treated as a show cause notice rather than a final assessment order. The assessing authority was left free to decide classification and tax rate independently on the basis of law and objections filed.

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Issues: (i) Whether the Commissioner's circular directing assessing authorities to treat mobile phones and cell phones as unclassified goods taxable under Schedule V fettered the quasi-judicial powers of the assessing authority; (ii) Whether the proceedings dated 06.11.2014 were to be treated as a show cause notice or as a final assessment order.

Issue (i): Whether the Commissioner's circular directing assessing authorities to treat mobile phones and cell phones as unclassified goods taxable under Schedule V fettered the quasi-judicial powers of the assessing authority.

Analysis: The classification of mobile phones and cell phones had to be determined by the assessing authority while exercising quasi-judicial powers. In the absence of statutory sanction, the Commissioner could not issue an administrative circular directing the assessing authorities to proceed on the basis that the goods were unclassified and taxable at the higher rate. Such a circular would improperly constrain independent assessment on the applicable entry and rate.

Conclusion: The circular was set aside as it could not bind or fetter the assessing authority's independent quasi-judicial function.

Issue (ii): Whether the proceedings dated 06.11.2014 were to be treated as a show cause notice or as a final assessment order.

Analysis: Although the proceedings demanded payment of differential tax and had the character of an assessment-related communication, objections were invited from the petitioner. In these circumstances, the proceedings were treated as a show cause notice, with liberty to file objections and obtain a reasoned decision in accordance with law.

Conclusion: The proceedings dated 06.11.2014 were treated as a show cause notice and not as a final assessment order.

Final Conclusion: The writ petitions succeeded to the extent that the impugned circular was quashed, while the demand notice was preserved only as a notice requiring objections and a fresh reasoned decision by the assessing authority.

Ratio Decidendi: An administrative circular cannot direct a quasi-judicial assessing authority to adopt a predetermined tax classification or rate in the absence of statutory authority, and a communication inviting objections cannot be treated as a final assessment if the assessee is still afforded an opportunity to respond.

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