Pending abatement claim must be decided first before adjudicating demand, interest and penalty under compounded levy scheme.

A demand under the compounded levy scheme cannot be validly adjudicated while a pending abatement application remains undecided. Where the abatement request was filed before adjudication but no operative order was passed on it, the subsequent demand, interest and penalty were premature and not permissible in law. The impugned orders were therefore set aside, and the matter was remanded for de novo consideration after disposal of the abatement application, with an opportunity of hearing to the parties.

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Issues: Whether the demand, interest and penalty could be sustained when the abatement application had not been disposed of before adjudication, and whether the matter required remand for fresh decision after considering the abatement claim.

Analysis: The abatement application was filed before the show cause notices were adjudicated, yet no operative order was passed on that application. The adjudication of the demand, interest and penalty therefore proceeded without first deciding the pending abatement claim. Such adjudication was held to be premature and not permissible in law. Since the operative portion of the order did not decide the abatement issue, the impugned orders could not stand and the matter required fresh consideration. The original adjudicating authority was directed to proceed de novo only after disposal of the abatement application by the Commissioner, and the parties were to be given an opportunity of hearing.

Conclusion: The demand, interest and penalty were set aside and the matter was remanded for fresh adjudication after deciding the abatement application.

Final Conclusion: The appellant succeeded on the legality of the adjudication, and the dispute was returned for fresh decision in accordance with law after first determining the abatement claim.

Ratio Decidendi: A demand under the compounded levy scheme cannot be validly adjudicated without first disposing of a pending abatement application, and any such adjudication is liable to be set aside and remanded for de novo consideration.

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