Court quashes interest demand, emphasizes natural justice principles. Assessing Officer must independently assess. Fair opportunity for hearing.

The Court set aside the demand notice for interest on belated tax payment, remitting the matter for fresh consideration. It held that reopening assessment solely based on Audit Party's opinion violates principles of natural justice. The Assessing Officer must independently form a view, issue notice, consider objections, and pass orders. The respondent was directed to decide on merits, providing the petitioner a fair opportunity for a personal hearing.

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Issues involved:
1. Petition seeking Writ of Certiorari to quash demand notice for interest on belated tax payment.
2. Validity of reopening assessment based on Audit Party's opinion.
3. Compliance with principles of natural justice in considering objections/representations.

Analysis:
1. The petitioner filed a writ petition seeking to quash a demand notice for interest on belated tax payment. The respondent passed the impugned notice based on the report of the Audit Party, despite the petitioner's claim of no default in tax payment. The petitioner argued that the Audit Party's opinion alone cannot justify reopening the assessment. The respondent, however, contended that the belated payment was brought to their notice by the Audit Party, and interest was levied after considering the petitioner's representation.

2. The Court acknowledged that the Assessing Officer cannot reopen the assessment solely based on the Audit Party's opinion. Citing a judgment from the Punjab and Haryana High Court, it was emphasized that the Assessing Officer must independently form a view for reopening, issue notice to the parties, consider objections/representations, and then pass necessary orders. In this case, the petitioner's objections were not considered before issuing the demand notice, violating principles of natural justice.

3. Consequently, the Court set aside the demand notice and remitted the matter back to the respondent for fresh consideration. The respondent was directed to independently record views for reopening, consider objections/representations, and pass orders within eight weeks. The Court clarified that it did not express any opinion on the merits, instructing the respondent to decide the issue on its merits and in accordance with the law while providing the petitioner with a fair opportunity for a personal hearing.

This detailed analysis of the judgment highlights the issues raised, legal arguments presented, and the Court's decision, ensuring a comprehensive understanding of the case and its implications.

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