B. G. Exploration and Production India Limited Vs State of Maharashtra (Bombay High Court)
Bombay High Court held that best judgment assessment u/s. 23(2) of the MVAT Act can be passed provided registered dealer fails to comply with the terms of any show cause notice. Since the pre-conditions are not satisfied, best judgement assessment passed is liable to be quashed.
Facts- Petitioner is in the business of exploration of petroleum resources in ‘Panna and Mukta’ and ‘Mid and South Tapti’ fields off the coast of Mumbai. The area where Petitioner operates is situated at a distance ranging from 60 to 120 nautical miles from the territorial baselines of India. Based on the exploration in the contract areas, Petitioner sells petroleum crude and natural gas to the nominated agencies of the Government of India. According to Petitioner, it will not fall within the jurisdiction of Respondent No.2, i.e., the Deputy Commissioner of State Tax exercising the jurisdiction under the Maharashtra Value Added Tax Act, 2002.
It is Petitioner’s case that a show cause notice dated 7th December 2023 without any details was issued calling upon Petitioner to attend the office of Respondent No.2. Respondent No.2 proceeded to pass the impugned order dated 28th March 2024 u/s. 23 of the MVAT Act. Respondent No.2 has passed order without dealing with any points and simply on the basis of best judgment basis u/s. 23(2) of the MVAT Act.
