Conditional reassessment notices remain valid where the core tax issue is already pending in appeal.

A reassessment notice under the Karnataka Value Added Tax Act was not illegal merely because the underlying composition tax issue was already pending in appellate proceedings. The authorities could issue the notice within limitation to protect the revenue's position, while ensuring that the reassessment did not prejudice the pending appeal. Reassessment could therefore proceed on a conditional basis, and any reassessment order was not to be enforced until the appellate decision was delivered.

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Issues: Whether the reassessment notice issued under the Karnataka Value Added Tax Act, 2003 could be treated as illegal or irregular solely because the underlying tax issue was pending consideration in another appeal and whether the reassessment proceedings could be continued subject to that result.

Analysis: The issue regarding the petitioner's eligibility for composition tax under Section 15 of the Karnataka Value Added Tax Act, 2003 was already seized of in pending appellate proceedings. In that situation, the authorities were required to preserve the revenue's position by initiating proceedings within the period of limitation, while also ensuring that any reassessment did not prejudice the outcome of the pending appeal. The notice under Section 39(1), read with Sections 36(1) and 72(2), was therefore not rendered illegal merely because the connected issue was sub judice. At the same time, the reassessment could appropriately be made conditional upon the result of the pending matter, and any order passed was not to be enforced until the appellate decision was rendered.

Conclusion: The reassessment notice was upheld and the respondent was permitted to proceed with reassessment, subject to the result of the pending appeal and without enforcement of any reassessment order until that appeal was decided.

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