Settlement-based demand notices upheld where tax and interest were already determined, with rectification left open for any mistake.

Demand notices issued after settlement proceedings were treated as consequential to the Settlement Commission's order, because tax and interest had already been determined under the settlement. The earlier communication from the Assessing Officer was only an intimation of tax payable and not a demand notice. The challenge to quash the impugned notices failed because they were issued pursuant to the settlement order, and any objection that the notices did not conform to that order required factual verification. The petitioners were nevertheless left free to seek rectification if any mistake existed in the notices.

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Issues: Whether demand notices issued by the Assessing Officer after settlement proceedings could be quashed on the ground that tax and interest had already been determined by the Settlement Commission and whether any grievance in the notices could be pursued by rectification.

Analysis: The petitioners had approached the Settlement Commission for settlement of their cases, and the Commission determined the tax and interest payable under the settlement order. The Assessing Officer thereafter sought proof of payment and, on being dissatisfied with the reply, issued demand notices in terms of the settlement order. The earlier communication sent by the Assessing Officer to the Settlement Commission was only an intimation of tax payable and was not itself a demand notice. The Court found no basis to quash the impugned notices as they were issued pursuant to the settlement order. The objection that the notices were not in conformity with the settlement order involved factual verification.

Conclusion: The challenge to the demand notices failed, and the notices were upheld. The petitioners were left at liberty to seek rectification, if any mistake existed in the notices.

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