Tax Assessment Order Quashed: Overlapping Periods Invalidate Annexure-5, Directing Comprehensive Rehearing with Fair Opportunity

HC found overlapping assessment periods in tax orders under Annexures-1, 5, and 6. The court quashed the order under Annexure-5 due to lack of proper assessment and directed the Adjudicating Authority to rehear the matter, providing both parties an opportunity to be heard. The case was remitted for fresh proceedings with specific instructions for comprehensive review.

---

---

Issues:
Challenge to orders passed by authority under Annexures-1, 5, and 6 based on overlapping period.

Analysis:
The petitioner challenged the orders passed by the authority under Annexures-1, 5, and 6, alleging that the demand was raised without considering the overlapping period. The counsel for the petitioner argued that the order under Annexure-1 was based on an intelligence report for the years 2017-18 and 2018-19, while the order under Annexure-5 did not take into account the assessment already done by the authority under Annexure-1. On the other hand, the counsel for the opposite parties contended that the orders were distinct, covering different periods, and the petitioner had multiple opportunities to participate in the proceedings but failed to do so. The Adjudicating Authority had given the petitioner ample chances to present any overlapping amounts, but the petitioner did not engage in the process.

The High Court examined the facts and found that the assessment for the financial years 2017-18 and 2018-19 was conducted under Annexure-1, while the order under Annexure-5 pertained to the period from October 2017 to March 2018. The Court noted that the petitioner never appeared before the Adjudicating Authority despite being notified multiple times. Although the petitioner had requested the authority to consider the overlapping amounts, mere submission of a request letter was deemed insufficient to establish active participation in the proceedings. The Court emphasized that had the petitioner engaged in the process, the issue of overlapping amounts could have been addressed. It was observed that the order under Annexure-5 did not consider the facts presented in the order under Annexure-1, leading to a lack of proper assessment.

Consequently, the High Court held that the order dated 04.12.2023 passed by the Adjudicating Authority under Annexure-5 was not legally sustainable and quashed it. The matter was remitted back to the Adjudicating Authority for rehearing and issuing an appropriate order after providing an opportunity for both parties to be heard. The petitioner was directed to appear before the Adjudicating Authority on a specified date for the final disposal of the matter. The writ petition was disposed of based on these directions and observations.

---