Section 73 demand barred where earlier notices existed and the assessee was not liable to file returns.

Section 73 of the Finance Act, 1994 was treated as inapplicable where the assessee was not required to file returns under Section 70 and fell within the scope of Section 71A, consistent with the Supreme Court's rulings. A later show-cause notice for the same period and cause was also held barred when earlier notices had already been issued. On those facts, the demand was treated as not recoverable, and the Commissioner (Appeals) was found to have correctly applied the binding precedent. The revenue challenge therefore failed and the assessee's relief was upheld.

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Issues: Whether the show-cause notice and resulting demand under Section 73 of the Finance Act, 1994 were sustainable in view of the assessee not being liable to file returns under Section 70 and the existence of earlier show-cause notices for the same period.

Analysis: The appeal turned on the effect of the Supreme Court's rulings that Section 73 could not be invoked against persons covered by Section 71A and that a subsequent notice for the same period, where earlier notices had already been issued, was barred. On the facts, the notice was issued after the new Section 73 came into force, and earlier notices had already been issued for the same period and cause. In that situation, the demand was treated as not recoverable and the Commissioner (Appeals) was held to have correctly applied the governing precedent.

Conclusion: The revenue challenge failed and the assessee's relief was upheld.

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