Failed To Comply With S.23(4) Of MVAT Act Along With Non-Application Of Mind & Legal Malafide: Bombay HC Quashes Assessment, Imposes 50K Cost On Dept

The Bombay High Court has quashed an assessment order under the Maharashtra Value Added Tax (MVAT) Act due to the department’s failure to comply with statutory provisions and non-application of mind. The court found that the department had not followed the mandatory provisions of Section 234 of the MVAT Act, which requires a proper assessment process. Additionally, the court noted that the assessment order was issued without considering the relevant facts and circumstances, indicating a lack of due diligence. The court held that such an assessment order is legally malafide and cannot be sustained. This ruling highlights the necessity for tax authorities to adhere to statutory requirements and ensure a fair and thorough assessment process.