Court quashes tax order, cites lack of natural justice, mandates fresh hearing. Review directed.

The court partially allowed the writ petition, quashing the order issued under Section 179 of the Income Tax Act due to lack of compliance with natural justice principles. The court instructed the authority to issue fresh orders after providing the petitioner with a hearing. Additionally, the court directed a review of the necessity for an order under Section 230 based on the Section 179 outcome and appellate orders within a specified timeline, while the existing order under Section 230 would remain in force until the issuance of fresh orders.

---

---

Issues:
Challenge to orders issued under Sections 230 and 179 of the Income Tax Act.

Analysis:
1. The petitioner, a third accused in a CBI case, challenged orders Ext.P8 and P13 issued under Sections 230 and 179 of the Income Tax Act. Ext.P8 order stated the petitioner's outstanding liability and restriction on leaving India without a Tax Clearance Certificate. Ext.P13 order held the petitioner jointly liable for the company's tax dues.

2. The petitioner claimed ignorance of the case due to residing abroad for medical treatment. He obtained court permission to travel abroad twice. Ext.P8 order declared him an assessee in default with significant liabilities. The petitioner challenged the orders based on ongoing appeals against the demands raised.

3. Respondents argued that the petitioner evaded proceedings, necessitating orders based on available records. They highlighted the petitioner's role as a director of the company and non-cooperation in investigations. The respondents justified the orders based on available company records and the petitioner's shareholding.

4. The petitioner contended that Ext.P13 order was illegal as it was issued without notice. The court noted the importance of natural justice in passing orders under Section 179 of the Act. As the petitioner was in judicial custody during the notice period, proper service was crucial, which was not done.

5. The court found Ext.P13 order lacking compliance with natural justice principles and directed fresh orders with an opportunity for the petitioner to be heard. The court instructed the competent authority to reconsider the necessity of an order under Section 230 post the Section 179 proceedings and appellate orders.

6. The writ petition was partially allowed, quashing Ext.P13 order and instructing the second respondent to issue fresh orders under Section 179 after affording the petitioner a hearing. Subsequently, the second respondent was directed to review the need for an order under Section 230 based on the Section 179 outcome and appellate orders within a specified timeline. Ext.P8 order would remain in force until the fresh orders were issued under Section 230.

---