Pending beneficial scheme application can invalidate a tax assessment if the authority fails to decide it first.
A tax assessment under the Uttar Pradesh Value Added Tax Act, 2008 could not stand where the taxpayer's application for benefit under the Government Order dated 18.02.2016 remained pending and was not decided by the competent authority before the assessment was made. The Court treated the unresolved scheme application as material, noting that no rejection or decision had been passed on it while the tax liability was assessed and sustained in appeal. The impugned order was therefore set aside and the matter remitted for fresh consideration in light of the pending application and the Government Order.
Issues: Whether the tax assessment and appellate order could stand when the revisionist's application under the Government Order dated 18.02.2016 remained pending and no order was passed on it before proceeding with assessment under Section 28(2) of the Uttar Pradesh Value Added Tax Act, 2008.
Analysis: The revisionist had applied for the benefit of the Government Order dated 18.02.2016, which contemplated acceptance of applications even beyond the initial period on payment of interest by the competent authority. The record showed that the application was not rejected and no order was passed by the Commissioner or the competent authority, while tax liability was nevertheless assessed and sustained in appeal. In these circumstances, the Court treated the failure to decide the application as material and found that the impugned tax order had been passed without first dealing with the pending request under the scheme.
Conclusion: The assessment order could not be sustained in its existing form and the matter required fresh consideration in light of the Government Order dated 18.02.2016 and the pending application.
Final Conclusion: The revision succeeded to the extent that the impugned order was set aside and the matter was sent back for reconsideration on the basis of the pending scheme application.
Ratio Decidendi: Where a taxpayer's application under a beneficial scheme remains pending and the competent authority does not decide it, a consequential tax order passed without first addressing that application is liable to be set aside and reconsidered.
TaxTMI 
AI Drafter ✕
TaxTMI 
