Monthly tax period cannot be clubbed into one yearly assessment; matter remanded for fresh assessment on records

The monthly tax period under the Act could not be converted into a single yearly assessment by clubbing twelve months together, so the assessment order was unsustainable and was set aside. The matter was remanded for fresh consideration, with directions that the assessee appear before the department with books of account and other documents. The department may examine the records, issue notice if any anomaly is found, and then complete assessment in accordance with law.

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Issues: Whether the assessment order was sustainable when the Revenue clubbed twelve monthly tax periods into one yearly assessment and whether the matter should be remanded for fresh assessment after giving the assessee an opportunity to produce books of account and related documents.

Analysis: The assessee contended that the tax period under the Act was a calendar month and that the Revenue could not assess liability by combining the entire period from April 2009 to March 2010. The Revenue did not dispute that the tax period was monthly and accepted that the assessment could not be made by clubbing twelve months together. It was also noted that the assessee had earlier not responded to the notices issued by the department. In view of this, the Court directed the assessee to appear before the Revenue Department with the books of account and other documents, after which the department could examine the records, issue notice if any anomaly was found, and then proceed with assessment in accordance with law.

Conclusion: The assessment order was unsustainable and was set aside, and the matter was remanded to the department for fresh consideration in accordance with the directions issued.

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