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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: (i) Whether prior notice was mandatory before inspection of the mining lease premises; (ii) Whether the demand order dated 30.12.2021 could be sustained without supplying the inspection report dated 9.4.2021 and without affording an opportunity of hearing.
Issue (i): Whether prior notice was mandatory before inspection of the mining lease premises.
Analysis: The Rules of 2017 did not contain any statutory requirement mandating prior notice before inspection. In the absence of such a provision, the authorities were entitled to conduct a surprise inspection. The inspection was also held in the presence of a representative of the lease holder, and the factual challenge to the inspection process was not accepted.
Conclusion: Prior notice was not mandatory, and the inspection could not be invalidated on that ground.
Issue (ii): Whether the demand order dated 30.12.2021 could be sustained without supplying the inspection report dated 9.4.2021 and without affording an opportunity of hearing.
Analysis: The fresh inspection was undertaken on the petitioner's representation after the earlier demand had been raised. Before maintaining the penalty, the authorities were required to objectively consider the later inspection report and afford a reasonable opportunity to meet it. Non-supply of the report and absence of a hearing amounted to violation of natural justice and reflected pre-determination.
Conclusion: The order dated 30.12.2021 could not be sustained without prior supply of the report and a hearing.
Final Conclusion: The writ petition succeeded. The impugned orders were quashed, and the matter was left open for a fresh decision after granting the petitioner a reasonable opportunity of hearing.
Ratio Decidendi: Where a demand is to be maintained on the basis of a fresh inspection initiated on a party's representation, the authority must disclose the material relied upon and afford a pre-decisional hearing before confirming the demand; absent a statutory mandate, prior notice is not required for inspection itself.
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