Tax Assessment Order Invalidated Due to Procedural Flaws in Audit Notice, Directing Fresh Evaluation with Proper Hearing Opportunity

HC quashed assessment order for tax period 2017-18 involving freight forwarding services. Court found procedural defects in audit notice and show cause process. Directed reassessment with proper consideration of petitioner's submissions, mandating fresh order within two months and providing opportunity for personal hearing. No costs awarded.

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Issues: Assessment order for tax period 2017-18 challenged by petitioner engaged in freight forwarding services; Alleged defects in audit notice and subsequent show cause notice; Consideration of replies and documents by assessing officer questioned.

Judgment Summary:

Issue 1: Compliance with Principles of Natural Justice
The petitioner challenged an assessment order issued on 31.12.2023 for the tax period 2017-18. The petitioner, a company providing freight forwarding services, received an audit notice followed by a show cause notice regarding alleged defects. The petitioner responded to these notices, providing explanations and documents. However, the assessing officer issued the impugned assessment order without duly considering the petitioner's replies and documents, leading to the conclusion that the process was rushed. The petitioner contended that the assessment order should be set aside.

Issue 2: Consideration of Replies and Documents
The petitioner's counsel highlighted that the replies dated 06.06.2023, 29.09.2023, and 26.10.2023 addressed each alleged defect, with additional information provided via email on 31.12.2023. The assessing officer's findings on Defect No.12 and Defect No.13, particularly regarding pre-GST period turnover and certification, were deemed inadequate and cryptic. The assessment order failed to take into account the petitioner's submissions, indicating a lack of proper consideration.

Judgment:
The High Court quashed the assessment order dated 31.12.2023 and remanded the matter for reconsideration. The assessing officer was directed to afford the petitioner a reasonable opportunity, including a personal hearing, consider all replies and documents submitted, and issue a fresh assessment order within a maximum of two months. The writ petition was disposed of with no costs, and related motions were closed accordingly.

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