Fresh Section 148A(b) Notice Without Supplying Material Held Unsustainable by Gujarat HC

Champion Exim Co. was subjected to reassessment proceedings for AY 2018-19, which were earlier quashed by the Gujarat High Court in Special Civil Application No. 7429 of 2022, with a specific direction to the Assessing Officer to continue proceedings from the stage of Section 148A(b) after granting an opportunity to reply. Instead of proceeding from the directed stage, the department issued a fresh notice under Section 148A(b) on 14.08.2025 and thereafter passed an order dated 12.09.2025 under Section 148A(d), followed by a notice under Section 148.

The petitioner sought disclosure of crucial material relied upon by the department, including investigation inputs, sanction under Section 151, and evidence linking the petitioner to the challenged consignment. But there was no material provided. Aggrieved by the fresh notices and orders passed without furnishing the related material, the petitioner approached the High Court.

Main Issue: Whether reassessment proceedings initiated by issuing a fresh notice under Section 148A(b), contrary to earlier High Court directions and without supplying relied-upon material to the assessee, are sustainable in law.

HC Decided: The Gujarat High Court held that the Assessing Officer acted contrary to the earlier directions issued by the Court by issuing a fresh notice under Section 148A(b) instead of continuing proceedings from the mandated stage. The Court further held that failure to supply the material relied upon for initiating reassessment amounted to a clear violation of the principles of natural justice. It was observed that reassessment proceedings premised on undisclosed material cannot be sustained.

Therefore, the impugned order under Section 148A(d) dated 12.09.2025 and the consequential notice under Section 148 were quashed. The respondents were directed to recommence proceedings strictly from the notice dated 19.03.2022 issued under Section 148A(b), supply all relevant material sought by the petitioner, and thereafter pass a fresh order in accordance with law within twelve weeks.

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