Electronic service under tax law upheld, but mechanically issued assessment notices failed for non-application of mind and legal inconsistency.

Electronic service of DVAT notices on departmental website was treated as valid where the prescribed system under the Act, Rules and IT Act made notices accessible to registered dealers. Writ jurisdiction was also held not barred by an alternative remedy when the assessment notices showed obvious and glaring defects. However, default assessment notices were invalidated because they were internally inconsistent, mechanically generated and reflected non-application of mind, including apparent mismatch between zero turnover and tax demands and an erroneous use of the DVAT regime for interstate sales. The matter was remitted for fresh consideration after an effective opportunity of hearing.

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Issues: (i) whether the writ petitions should be rejected on the ground of an alternative remedy under the DVAT Act; (ii) whether service of the notices under section 59(2) of the DVAT Act by uploading them on the departmental website amounted to valid service; (iii) whether the default assessment notices dated 7 September 2015 were without jurisdiction because they were framed by the Record Keeper and not the VATO; and (iv) whether the impugned default assessment notices of tax, interest and penalty were unsustainable for non-application of mind and apparent errors on their face.

Issue (i): whether the writ petitions should be rejected on the ground of an alternative remedy under the DVAT Act

Analysis: The existence of an objection remedy did not bar writ jurisdiction where the impugned orders disclosed obvious and glaring errors. The challenge went to the legality of the assessment notices themselves and the Court found that relegating the petitioner to the alternative forum would only prolong the dispute without effective relief.

Conclusion: The alternative remedy objection was rejected.

Issue (ii): whether service of the notices under section 59(2) of the DVAT Act by uploading them on the departmental website amounted to valid service

Analysis: The electronic mode of service was tested against section 100A of the DVAT Act, rule 62 of the DVAT Rules and sections 12 and 13 of the Information Technology Act. The Commissioner's order dated 17 January 2014 validly prescribed website-based service as a recognized mode of service and made the notices available to dealers on their login pages. The Court held that the system of electronic service was not inconsistent with the IT Act and that a registered dealer was expected to access the departmental website.

Conclusion: The notices were held to have been validly served.

Issue (iii): whether the default assessment notices dated 7 September 2015 were without jurisdiction because they were framed by the Record Keeper and not the VATO

Analysis: The file notings only showed an entry signed by the Record Keeper referring to default assessment orders and penalty. That notation, by itself, did not establish that the Record Keeper had framed or issued the notices. The material was insufficient to infer lack of authority in the VATO.

Conclusion: The challenge on the ground that the notices were framed by the Record Keeper was not accepted.

Issue (iv): whether the impugned default assessment notices of tax, interest and penalty were unsustainable for non-application of mind and apparent errors on their face

Analysis: The assessment notices were mechanically generated and internally inconsistent. They showed zero assessed turnover but still computed substantial tax demands. They also proceeded on the basis of inter-state sales to a Rajasthan dealer while invoking the DVAT Act, although such transactions would fall within the CST regime. The Court found these glaring inconsistencies to be sufficient proof of non-application of mind and held that the notices could not stand.

Conclusion: The impugned default assessment notices of tax, interest and penalty were set aside.

Final Conclusion: The electronic service challenge failed, but the default assessment notices were invalidated because they were mechanically issued and legally unsustainable, and the matter was sent back for fresh consideration after giving the petitioner an effective opportunity of hearing.

Ratio Decidendi: A tax assessment notice that is internally inconsistent, mechanically generated, and based on a fundamentally erroneous application of the charging statute is vitiated for non-application of mind and cannot be sustained, even if prior notice was validly served electronically.

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