Proper service of assessment notice under VAT law required before recovery, with order set aside for breach of natural justice.

An assessment under Section 25 of the Kerala Value Added Tax Act was set aside because proper notice and service of the assessment order were not established. The Court accepted that the covers sent to the taxpayer were returned with an endorsement that the door was locked, and held that recovery steps could not proceed without effective communication of the order. The assessment was therefore treated as contrary to Section 25 and violative of natural justice, while the merits of the assessment were left unexamined. The matter was restored for fresh completion of assessment after notice.

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Issues: Whether the assessment order made under Section 25 of the Kerala Value Added Tax Act was liable to be set aside for want of proper notice and non-service of the order.

Analysis: The assessment was challenged on the ground that notice was not effectively served and that recovery steps were initiated without communicating the assessment order. The materials placed before the Court showed that the covers sent to the petitioner were returned with the endorsement that the door was locked, and the Court accepted the petitioner's explanation that the original assessment order had not been served. On that basis, the assessment order was found to be contrary to Section 25 of the Kerala Value Added Tax Act and violative of the principles of natural justice. The merits of the assessment were not examined.

Conclusion: The assessment order dated 25.09.2018 was set aside and the matter was restored to the file for fresh completion of assessment after notice.

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