Assessment against a non-existent amalgamated entity and unserved notice breach natural justice and require fresh proceedings.

An assessment made in the name of a dealer that had already ceased to exist on amalgamation could not be sustained, because proceedings must be taken in the name of the amalgamated entity to which the business stands transferred. The order was also vitiated where it did not disclose the date or service of the show-cause notice, since that denied a fair opportunity and breached natural justice. In fresh proceedings before the competent authority, the assessee could raise all available objections, including limitation, and support them with material. The assessment was set aside and the matter left to be reconsidered afresh in accordance with law.

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Issues: (i) whether an assessment order could be sustained when it was passed in the name of a dealer that had already ceased to exist on amalgamation, and whether the turnover had to be assessed in the name of the amalgamated entity; (ii) whether the impugned assessment was vitiated for want of service of notice and breach of natural justice, and whether the assessee could still raise the plea of limitation in fresh proceedings.

Issue (i): whether an assessment order could be sustained when it was passed in the name of a dealer that had already ceased to exist on amalgamation, and whether the turnover had to be assessed in the name of the amalgamated entity.

Analysis: Once the original dealer had merged with the petitioner with effect from the notified date, the original dealer no longer survived as a separate assessee. Proceedings could not lawfully continue or culminate in an assessment against a non-existent entity. The proper course was to proceed against the amalgamated entity in whose name the business stood transferred and whose assessment was already pending before the competent authority.

Conclusion: The assessment made in the name of the non-existent amalgamated company was invalid and could not be sustained.

Issue (ii): whether the impugned assessment was vitiated for want of service of notice and breach of natural justice, and whether the assessee could still raise the plea of limitation in fresh proceedings.

Analysis: The order did not disclose the date of the show-cause notice or its service, and the petitioner disputed receipt of the notices referred to in the order. That deficiency amounted to a denial of a fair opportunity. At the same time, since the assessee was being relegated to fresh proceedings before the proper authority, it was open to the petitioner to raise all available objections, including the plea of limitation under the relevant rule, and to place supporting material before the assessing authority.

Conclusion: The impugned assessment was also vitiated for violation of natural justice, and the limitation plea was left open for consideration in the fresh proceedings.

Final Conclusion: The writ petition succeeded, the assessment order was set aside, and the competent authority was permitted to issue a fresh show-cause notice to the petitioner and decide the matter afresh in accordance with law.

Ratio Decidendi: An assessment cannot be sustained against an assessee that has ceased to exist by amalgamation, and any adjudication founded on an unserved or undisclosed notice violates natural justice.

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