Natural justice and alternate remedy principles limited writ interference with a KVAT assessment despite pending penalty proceedings.

Assessment proceedings under the KVAT Act were not restrained by the interim stay, which applied only to penalty proceedings, and the assessee had received notice and an opportunity of personal hearing that he declined to use. On those facts, the Kerala HC found no violation of natural justice or jurisdictional infirmity in the assessment under Article 226, and held that the existence of an efficacious statutory appeal weighed against writ interference. The challenge to the assessment order therefore failed, and the petitioner was directed to pursue the statutory appellate remedy.

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Issues: Whether the assessment order passed under section 25(AA) of the KVAT Act was liable to be interfered with under Article 226 of the Constitution of India on the ground that penalty proceedings were pending and stayed, and whether the petitioner should be relegated to the statutory appellate remedy.

Analysis: The assessment order showed that the assessee was given notice of the proposed assessment and an opportunity of personal hearing, which he declined to avail. The assessment proceeded on the basis of unaccounted sales for the relevant year, and the assessing officer recorded reasons for continuing the proceedings notwithstanding the pendency of the earlier writ petition. The earlier interim stay was confined to the penalty proceedings and did not operate as a restraint on the assessment under section 25(AA). As the procedure adopted satisfied the principles of natural justice and no restraint existed against the assessment proceedings, no jurisdictional infirmity was made out. The existence of an efficacious statutory appeal also weighed against interference in writ jurisdiction.

Conclusion: The challenge to the assessment order failed, and interference under Article 226 was declined. The petitioner was left to pursue the statutory remedy.

Final Conclusion: The writ petition was not maintainable for interference on merits in view of the valid assessment proceedings and the available appellate remedy.

Ratio Decidendi: Where assessment proceedings are not restrained by any subsisting order, and the assessee has been afforded notice and hearing, the High Court will not interfere in writ jurisdiction merely because connected penalty proceedings are pending; the statutory appellate remedy must ordinarily be pursued.

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