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Issues: (i) Whether the assessment orders based on enhancement of turnover could be sustained without issuance of notice under Section 37(1) of the Assam Value Added Tax Act, 2003 and without compliance with the proviso to Section 36(5) of that Act. (ii) Whether the assessments for the assessment years 2012-13 and 2013-14 were vitiated on the ground of limitation under Section 39 of the Assam Value Added Tax Act, 2003 because the demand notices were issued long after the assessments and no explanation for the delay was furnished.
Issue (i): Whether the assessment orders based on enhancement of turnover could be sustained without issuance of notice under Section 37(1) of the Assam Value Added Tax Act, 2003 and without compliance with the proviso to Section 36(5) of that Act.
Analysis: The statutory scheme distinguishes between audit assessment under Section 36 and best judgment assessment under Section 37. Under Section 36, the prescribed authority may scrutinise returns, confirm self-assessment, or set aside self-assessment and assess the tax due, but the power to assess turnover to the best of judgment is not available in the same manner as under Section 37. A notice in Form 20 under Rule 22 of the Assam Value Added Tax Rules, 2005 is for audit assessment, while Form 21 under Rule 23 is required when the authority proposes best judgment assessment under Section 37. Where turnover is enhanced, the matter falls within Section 37 and the dealer must receive the notice contemplated by that provision. Further, if the authority relies on evidence collected by it, the proviso to Section 36(5) requires a reasonable opportunity of being heard before adverse inference is drawn.
Conclusion: The assessment orders enhancing turnover without a Section 37(1) notice were unsustainable, and the order based on Section 36(5) also stood vitiated for want of the mandatory opportunity of hearing.
Issue (ii): Whether the assessments for the assessment years 2012-13 and 2013-14 were vitiated on the ground of limitation under Section 39 of the Assam Value Added Tax Act, 2003 because the demand notices were issued long after the assessments and no explanation for the delay was furnished.
Analysis: Section 39 prescribes that no assessment under the preceding provisions shall be made after five years from the end of the relevant year. Although the assessment orders bore dates within the limitation period, the demand notices communicating them were issued only in July and August 2019. The delay remained unexplained. Applying the principle that an order must be made known to the affected party and the presumption that unexplained delay may indicate that the order was not made on the date it purports to have been made, the Court held that the assessments for 2012-13 and 2013-14 could not be treated as validly made within time.
Conclusion: The assessments for 2012-13 and 2013-14 were also invalid on limitation grounds.
Final Conclusion: The assessments and consequential demand notices were quashed, and the writ petitions were allowed.
Ratio Decidendi: Where the statute requires a specific notice for best judgment assessment, turnover cannot be enhanced without that notice, and an assessment that must be completed within a prescribed period is vulnerable if its communication is unexplainedly delayed beyond the limitation framework.
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