Non-application of mind in assessment led to quashing of the order and consequential bank attachment

An assessment order was found vulnerable because it ignored the C-Forms and F-Forms produced by the assessee, gave no reasons for rejecting that material, and did not reflect compliance with earlier directions to properly identify the disputed turnover. On that basis, the order was treated as suffering from patent non-application of mind and was set aside, with fresh assessment directed after considering all materials on record. The consequential bank account attachment, which depended entirely on the assessment demand, also lacked an independent basis once the assessment was quashed and was therefore set aside.

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Issues: (i) Whether the assessment order was sustainable when it did not consider the C-Forms and F-Forms produced by the assessee and contained no reasoning on those materials; (ii) whether the consequential attachment of the assessee's bank account could survive after the assessment order was set aside.

Issue (i): Whether the assessment order was sustainable when it did not consider the C-Forms and F-Forms produced by the assessee and contained no reasoning on those materials.

Analysis: The assessment order did not discuss the documents placed on record by the assessee and did not explain why the C-Forms and F-Forms were ignored while computing the tax liability. The absence of any reasoning on the material produced showed patent non-application of mind and rendered the assessment vulnerable. The order also did not reflect compliance with the earlier directions requiring proper identification and consideration of the disputed turnover.

Conclusion: The assessment order could not be sustained and was liable to be quashed with a direction to undertake fresh assessment after considering all materials on record.

Issue (ii): Whether the consequential attachment of the assessee's bank account could survive after the assessment order was set aside.

Analysis: The bank attachment was founded on the assessment demand. Once the assessment order itself was held unsustainable and directed to be redone, the attachment had no independent basis to continue.

Conclusion: The attachment order was also liable to be set aside.

Final Conclusion: The petition was allowed, the impugned assessment and consequential attachment were set aside, and the matter was remitted for fresh decision in accordance with law.

Ratio Decidendi: An assessment order that ignores material documents produced by the assessee and records no reasons for rejecting them is vitiated by non-application of mind and cannot be sustained in writ jurisdiction.

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