Show cause opportunity in assessment proceedings allowed, subject to part-payment of disputed tax and filing objections.

The Madras High Court permitted the assessee to treat the assessment proceedings as show cause notices and file objections, because the impugned order had not addressed the assessee's explanation or the statements recorded during the VAT audit. The court granted this further opportunity on a condition precedent: payment of 15% of the disputed tax within the stipulated time. If that payment was not made, the department was left free to proceed in accordance with law.

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Issues: Whether the assessee was entitled to have the assessment proceedings treated as show cause notices and to file objections after payment of a part of the disputed tax.

Analysis: The assessment was based on alleged short levy and cross-verification of sales and purchases. The assessee relied on statements recorded during VAT audit to contend that it had followed the method suggested by the departmental officer and that its stand was bona fide. The impugned order did not deal with those statements or the assessee's explanation. In these circumstances, the Court considered it appropriate to grant one further opportunity, but only on the condition that a portion of the disputed demand be paid.

Conclusion: The assessee was granted an opportunity to treat the impugned proceedings as show cause notices and submit objections, subject to payment of 15% of the disputed tax within the stipulated time, failing which the department was free to proceed in accordance with law.

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