Reassessment Notices for 2005-06 and 2006-07 Barred by Limitation, Court Upholds Natural Justice Principles.

The HC allowed the writ petitions, restraining the Assessing Officer from proceeding with reassessment notices issued in 2018 for the assessment years 2005-06 and 2006-07 under the Bihar Value Added Tax Act, 2005. The Court found the reassessment attempts were barred by limitation under Section 31, as the original self-assessments were valid and the impugned notices were issued beyond the permissible period. The Court invoked its jurisdiction under Article 226 of the Constitution to uphold the principles of natural justice, emphasizing the lack of jurisdiction due to expired limitation.

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Issues:
The judgment deals with the challenge to a reassessment order passed in 2018 for the years 2005-06 and 2006-07 under the Bihar Value Added Tax Act, 2005, on the grounds of being barred by limitation under Section 31.

For the assessment year 2005-06:
The petitioner filed its return for the period 2004-06 on time, leading to a self-assessment under Section 26. The Department issued a show-cause notice within the limitation period based on an audit objection, which was responded to by the petitioner. The Assessing Officer found the objection unsustainable and passed an order. Subsequent attempts at reassessment were made, but the original self-assessment remained valid. The impugned notice for reassessment in 2018 was deemed grossly delayed as it was issued long after the limitation period.

For the assessment year 2006-07:
Similarly, for this year, the petitioner filed a proper return on time, resulting in a self-assessment under Section 26. A reassessment was carried out based on an objection, but after appeal and acceptance of returns, the impugned notice for reassessment in 2018 was issued beyond the limitation period.

Interpretation of Sections 26 and 31:
The Court interpreted that the reassessment attempts made after the original self-assessment did not nullify the limitation period, and the Department was not permitted to proceed with the assessment due to the delay. The Court emphasized that the show-cause notice lacked jurisdiction as the limitation had expired, and the jurisdiction under Article 226 of the Constitution of India was invoked to restrain the Assessing Officer from proceeding against the assessee based on the impugned notices.

Conclusion:
The writ petitions were allowed, and the Assessing Officer was restrained from further action based on the reassessment notices issued after the limitation period, in accordance with the principles of natural justice and the discretionary power of the High Court under Article 226 of the Constitution.

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