Fair opportunity before tax arrears recovery: demand notice set aside, with access to records allowed before quantification.

Fair opportunity must be given before coercive recovery or final quantification of tax arrears where the assessee says relevant assessment records are unavailable. The Court set aside the impugned demand notice and directed that the assessee be allowed to inspect the records, take copies at its own cost, and file claims based on available C and F forms. The authority was then required to determine the liability in accordance with law after considering the materials produced.

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Issues: Whether the impugned demand notice was liable to be set aside and the assessee given access to the assessment records before quantification of the tax arrears.

Analysis: The dispute related to a large arrears demand for earlier assessment years, while the assessee asserted that relevant assessment records and supporting documents were not available to enable an effective reply. In these circumstances, and in view of the earlier direction requiring the department to furnish information to which the assessee was legally entitled, the Court held that fair opportunity had to be afforded before coercive recovery or final quantification. The assessee was therefore permitted to inspect the records, take copies at its own cost, and file claims based on the available C and F forms, after which the authority was to determine the liability in accordance with law.

Conclusion: The impugned notice was set aside and the assessee was given an opportunity to inspect the records and make claims before the authority quantified the amount due.

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