Procedural fairness in tax clarification matters: ex parte clarification and follow-on notices set aside, with fresh action allowed after hearing.

A clarification issued under the relevant sales tax provision was treated as binding on subordinate officers, but it could not stand where the affected assessee had not been put on notice or given an opportunity of hearing before its issuance. The High Court held that this absence of procedural fairness rendered the clarification unsustainable, and the consequential revision and pre-assessment notices also could not be sustained. The assessing authority was left free to proceed afresh on the merits, provided the assessee is heard and given an opportunity to object in accordance with law.

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Issues: Whether the impugned clarification and the consequential revision and pre-assessment notices were valid when no notice or opportunity of hearing had been given before issuing the clarification.

Analysis: The clarification under the relevant sales tax provision was treated as binding on officers subordinate to the Commissioner, but its validity depended on compliance with basic procedural fairness. Since the petitioner had not been put on notice before the clarification was issued, the clarification was found to be unsustainable. The Court also left it open to the assessing authority to proceed afresh on the merits after giving the petitioner an opportunity to object.

Conclusion: The impugned clarification and the consequential notices could not be sustained and were set aside, leaving the assessing authority free to pass fresh orders in accordance with law after hearing the petitioner.

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