Extended reassessment period under KVAT needs a separate prior order; composite notice and demand were quashed for breach of natural justice.

Under the KVAT reassessment framework, the extended limitation period could be invoked only after a valid, separate order under the enabling provision, and not through a composite notice and reassessment order under Sections 79 and 39(1). Because no reasonable opportunity to file objections was afforded, the notices and consequential demand orders were held unsustainable for breach of natural justice and were quashed. The matter was remitted for fresh consideration after objections, documents and personal hearing.

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Issues: Whether the impugned proposition notices and consequential reassessment and demand orders under the Karnataka Value Added Tax Act, 2003 could be sustained when the authority issued a composite notice invoking Section 79 and Section 39(1) without first passing an independent order under Section 79 and without affording the petitioner reasonable opportunity to file objections.

Analysis: The reassessment for the relevant period was required to be concluded within the ordinary limitation under Section 40(1) of the Karnataka Value Added Tax Act, 2003. The extended period under Section 40(2) could be invoked only if Section 79 was validly attracted and after a separate and independent order under Section 79 had been passed. The notices and orders were issued in a composite manner under Sections 79 and 39(1), and no reasonable opportunity was afforded before the impugned orders were made. That procedure was held to be impermissible and in breach of natural justice.

Conclusion: The notices and consequential orders were unsustainable and were quashed. The matter was remitted to the stage of the proposition notices for fresh consideration after objections, documents, and personal hearing.

Ratio Decidendi: Where the department seeks to invoke an extended reassessment period under the KVAT framework, a separate and prior order under the enabling provision is necessary, and reassessment cannot be completed by a composite notice and order without affording a meaningful opportunity of hearing.

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