Conditional opportunity to contest tax notice granted after partial payment, with objections, hearing, and assessment to follow in law.

The Madras HC noted that the petitioner had not replied to the show cause notice within time, but had already paid 25% of the disputed tax and the Department had also delayed further action. On that basis, it granted a further conditional opportunity to contest the proposed assessment and demand, requiring payment of an additional amount within the stipulated time. If the condition is met, the petitioner may file objections, the authorities must provide a personal hearing, and complete the assessment in accordance with law. The demand for the remaining tax and penalty is to remain in abeyance until final orders are passed.

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Issues: Whether the petitioner should be granted an opportunity to file objections to the show cause notice proposing assessment and demand of tax and penalty, subject to payment of part of the disputed tax.

Analysis: The petitioner had not responded to the notice within the time granted, but had already paid 25% of the disputed tax. The Court also noted delay on the part of the Department in taking further steps after issuance of the notice. In these circumstances, the Court granted a further opportunity to the petitioner on condition of payment of an additional amount within the stipulated time. Upon compliance, the petitioner was entitled to file objections, after which the authorities were directed to grant a personal hearing and complete the assessment in accordance with law. The demand for the balance tax and penalty was directed to remain in abeyance pending final orders.

Conclusion: The petitioner was granted a conditional opportunity to contest the notice, subject to payment of the directed amount within time, with consequential assessment to follow in accordance with law.

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