P. R. Ramachandra Menon, J. –

Whether a "composite notice" is enough to complete the escaped assessment of turnover under section 25(1) of the Kerala Value Added Tax Act, 2003 inviting objections, if any, and also mentioning about the "right to be heard" so as to satisfy the requirement under the "first proviso" to the said provision, is the point of dispute.

The petitioner is challenging the correctness and sustainability of exhibit P3 order passed by the respondent under section 25(1) of the KVAT Act, whereby huge liability is stated as mulcted on the shoulders of the petitioner; without giving an opportunity of hearing which is contrary to the statutory prescription under section 25(1) of the KVAT Act and hence is under challenge in this writ petition.

The sequence of events shows that the petitioner, who is engaged in executing works contract, has been submitting the returns as prescribed under the relevant provisions of law. Subsequently, on verification of the returns in respect of the assessment year 2007-08, the respondent observed some discrepancies and accordingly, exhibit P1 notice dated January 7, 2010 was issued, proposing to complete the assessment on "best judgment basis", inviting objections from the petitioner. Immediately on receipt of exhibit P1, the petitioner submitted exhibit P2 statement, also pointing out that exhibit P1 notice was served to the petitioner only on January 20, 2010. Thereafter the respondent proceeded with further steps and passed exhibit P3 order dated March 25, 2010, which is impugned in this writ petition.

The respondent has filed a counter-affidavit stating that the allegation as to the denial of an opportunity of hearing is thoroughly wrong and misconceived and that there is no violation of section 25(1) of the KVAT Act. It is also pointed out in para 4 of the counter-affidavit that the case projected from the part of the petitioner is not liable to be entertained, more so, since the petitioner has failed to furnish form 20H certificate duly counter-signed by the assessing authority of the sub-contractor. The other factual particulars with regard to the merits are also explained therein; stating that the impugned order was passed in conformity with the statutory prescription.

Section 25(1), reads as follows :

"Where for any reason the whole or any part of the turnover of business of a dealer has escaped assessment to tax in any year (or return period) or has been under-assessed or has been assessed at a rate lower than the rate at which it is assessable or any deduction has been wrongly made therefrom, or where any (input tax or special rebate) credit has been wrongly availed of, the assessing authority may, at any time within five years from the last date of the year to which the return relates, proceed to determine, to the best of its judgment, the turnover which has escaped assessment to tax or has been under-assessed or has been assessed at a rate lower than the rate at which it is assessable or the deduction in respect of which has been wrongly made or (input tax or special rebate) credit that has been wrongly availed of and assess the tax payable on such turnover or disallow the (input tax or special rebate) credit wrongly availed of, after issuing a notice on the dealer and after making such enquiry as it may consider necessary :

Provided that before making an assessment under this sub-section the dealer shall be given a reasonable opportunity of being heard :

Provided further that where the escapement is due to the application of incorrect rate of tax, no assessment under this sub-section shall be made where the dealer files revised return and pays the tax which has escaped assessment along with interest under sub-section (5) of section 31 and thrice the interest as settlement fee."

Mr. K. P. Dandapani, the learned senior counsel appearing for the petitioner, submits that, after issuance of the notice under section 25(1), it is very much mandatory on the part of the