Court quashes tax notice, emphasizes assessment before demand.

The court found that the petitioners had timely filed their returns showing nil return due to an exemption before its withdrawal. It noted that the State failed to meet the necessary conditions for issuing the notice for advance tax under the Chhattisgarh Value Added Tax Act. The court emphasized the requirement for assessment before demanding advance tax, quashing the notices and directing the State to conduct proper assessment proceedings. The writ petitions were allowed, setting aside the impugned notices and leaving the State the option to initiate appropriate assessment proceedings if necessary.

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Issues:
Challenge to notice for advance tax under Chhattisgarh Value Added Tax Act, 2005 for different assessment years.

Analysis:
The petitioners contested the notice for advance tax, arguing it was against the law as they had timely filed their returns showing nil return due to an exemption. The State government admitted the submission of returns by the petitioners, indicating no failure to furnish returns. The withdrawal of exemption was challenged, and the State's contention of non-compliance was refuted. The petitioners relied on judgments from the Madhya Pradesh High Court to support their case.

The State opposed the writ petitions, claiming the exemption was withdrawn, and there was a default in filing returns and paying taxes. They argued that the notices issued were in accordance with the law. The State highlighted the alleged non-compliance by the petitioners regarding advance tax.

Upon examining the contentions, the court found that the petitioners had indeed submitted their returns showing nil return, and the exemption was withdrawn after the returns were filed. The court noted that the necessary conditions for initiating proceedings under the Act were not met at the time of issuing the notice. The court also rejected the State's claim of deliberate non-compliance by the petitioners.

Referring to previous judgments, the court emphasized the need for assessment before demanding advance tax and quashed the notice issued by the State. The court directed the State to proceed with appropriate assessment proceedings in accordance with the law. The writ petitions were allowed, and the impugned notices were set aside, leaving the State with the option to initiate proper assessment proceedings if desired.

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