Natural justice and Covid-19 limitation extension governed reassessment withdrawing exemption and requiring fresh hearing.

A reassessment withdrawing exemption on the basis of disputed H Forms could not be sustained where the dealer was not afforded an effective hearing and the notice was not properly served; the order was therefore interfered with. The court also held that the Covid-19 limitation extension applied to statutory authorities as well as litigants, so the reassessment was not time-barred merely because it was passed in 2022 for an earlier assessment year; the limitation objection failed. The reassessment was set aside and the matter remitted to the assessing authority for fresh decision after hearing the dealer.

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Issues: (i) Whether the reassessment order withdrawing exemption based on the disputed H Forms could be sustained when passed without affording the petitioner a hearing and after a long lapse of time. (ii) Whether the order was barred by limitation in view of the period of limitation extended during the Covid-19 pandemic.

Issue (i): Whether the reassessment order withdrawing exemption based on the disputed H Forms could be sustained when passed without affording the petitioner a hearing and after a long lapse of time.

Analysis: The exemption granted earlier had been withdrawn nearly five years later on the basis of a verification report doubting the genuineness of the H Forms. The notice was returned with an endorsement indicating non-service at the registered address, and the petitioner was not given an effective opportunity to explain the genuineness of the forms. In these circumstances, the denial of hearing and the manner in which the exemption was withdrawn could not be sustained.

Conclusion: The reassessment order was not sustainable on this ground and required interference in favour of the petitioner.

Issue (ii): Whether the order was barred by limitation in view of the period of limitation extended during the Covid-19 pandemic.

Analysis: The period of limitation extended by the Supreme Court during the pandemic was held applicable not only to litigants filing proceedings but also to statutory authorities passing orders. Applying that extension, the reassessment order could not be treated as time-barred merely because it was passed in 2022 in relation to the earlier assessment year. The limitation objection was therefore rejected.

Conclusion: The limitation challenge failed and was decided against the petitioner.

Final Conclusion: The reassessment order was set aside, and the matter was sent back to the assessing authority for a fresh decision after hearing the petitioner.

Ratio Decidendi: The limitation extension ordered during the Covid-19 pandemic applies to statutory authorities as well, but any reassessment affecting exemption cannot be sustained unless the affected dealer is afforded a proper opportunity of hearing.

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