Kerala HC: Mere Non-Service of Assessment Order No Ground to Invoke Writ Jurisdiction When Statutory Appeal Remedy Exists
Case Background
Case Name: Chimera Industrial And Development Pvt. Ltd. Vs State Tax Officer (Kerala High Court)
Court: Kerala High Court
Legislation Involved: Kerala Value Added Tax Act (KVAT Act), CST Act
Overview of the Dispute
The Kerala High Court recently adjudicated upon a writ petition filed by Chimera Industrial And Development Pvt. Ltd., a private limited company that had been engaged in the manufacture of diesel dispensing units in the state of Gujarat. The company held registrations under both the Kerala Value Added Tax Act (KVAT Act) and the Central Sales Tax Act (CST Act). As per the petitioner's submissions, the entire business was sold off to a separate entity in the year 2018.
The matter in controversy pertained to the assessment year 2015-16, during which the assessing authority initiated proceedings by issuing a notice under Section 25(1) of the KVAT Act. The said notice proposed certain additions on account of alleged suppression of purchases and sales, alongside discrepancies identified in stock transfer records.
Sequence of Events Leading to the Writ Petition
Initial Notice and Reply
Upon receipt of the notice under Section 25(1) of the KVAT Act (marked as Ext.P3), the assessee filed a detailed reply (Ext.P4) addressing the proposed additions and offering explanations regarding the alleged discrepancies. This reply comprehensively dealt with the allegations of purchase suppression, sales suppression, and the stock transfer irregularities that had been flagged by the assessing officer.
Revised Notice and Subsequent Hearings
Following the submission of the reply, the assessing authority issued a revised notice (Ext.P5). The authorised representatives of the assessee duly appeared before the assessing officer and offered clarifications with respect to the discrepancies highlighted in the revised proposal. An additional notice was also issued as part of the ongoing hearing process.
Alleged Gap in Communication
The assessee contended that after the additional notice was issued during the hearing stage, no further notices were served upon it. The assessee claimed complete ignorance of any assessment order having been passed subsequent to its last engagement with the assessing officer.
Discovery of Assessment Order via Recovery Notice
The matter came to a head on 03.12.2025, when the assessee received a revenue recovery notice (Ext.P7) through its registered email ID. It was only upon receipt of this recovery notice that the assessee became aware that an assessment order had been passed pursuant to the proceedings initiated under Section 25(1) of the KVAT Act.
The assessee thereafter applied for a certified copy of the assessment order and also managed to independently procure a copy of the order (Ext.P10), which was dated 23.02.2021 — nearly four years prior to the recovery notice.
Grounds Raised Before the Kerala High Court
The assessee approached the Kerala High Court by way of a writ petition, challenging Ext.P10 (the assessment order dated 23.02.2021) on the following principal grounds: