Compounding application verification required before regular assessment; assessment set aside for failure to examine admissibility.

An assessment made under the regular regime cannot stand where the authority has not first verified whether a timely compounding application was filed and whether the compounding fee was duly deposited. The HC held that admissibility under the compounding scheme was a foundational fact requiring examination by the proper officer before proceeding to regular assessment. Because the assessment was made without addressing that claim, it suffered from an inherent defect and was unsustainable. The order was set aside and the matter remitted for fresh assessment after verification of the compounding application.

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Issues: Whether the assessment order could be sustained when the petitioner had allegedly applied for compounding within time and deposited the compounding fee, but the assessment was made without first verifying the fate of the compounding application.

Analysis: The assessment order proceeded on regular assessment without discussing the petitioner's claim that it had sought compounding for the relevant period and had complied with the scheme by making the necessary deposit. The record indicated that the question of admissibility under the compounding scheme had to be examined by the proper officer. In the absence of verification of that foundational fact, the assessment suffered from an inherent defect.

Conclusion: The assessment order was unsustainable and was set aside, with the matter remitted for a fresh assessment after first verifying the compounding application.

Ratio Decidendi: An assessment made under the regular regime cannot stand where the authority has not first verified the admissibility and subsistence of a timely compounding application that may govern the taxable liability.

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