Tax Assessment Order Quashed for Procedural Lapses: Company Granted Opportunity to Respond and Remit Partial Tax Amount Manufacturing company challenged tax assessment order for 2017-18 due to procedural irregularities. HC found procedural lapses in tax demand confirmation ...
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Tax Assessment Order Quashed for Procedural Lapses: Company Granted Opportunity to Respond and Remit Partial Tax Amount
Manufacturing company challenged tax assessment order for 2017-18 due to procedural irregularities. HC found procedural lapses in tax demand confirmation without hearing. Court quashed the assessment order, directing petitioner to remit 5% of disputed tax, allowing submission of reply and mandating respondent to provide reasonable opportunity and issue fresh order within two months.
Issues involved: Challenge to assessment order for assessment period 2017-18 based on lack of reasonable opportunity and absence of notice in Form ASMT 10.
Details of the judgment:
Issue 1: Lack of reasonable opportunity The petitioner, engaged in the business of manufacturing iron and steel products, challenged the assessment order for the assessment period 2017-18. The petitioner contended that a reasonable opportunity was not provided before the impugned order was issued. The petitioner highlighted that no personal hearing was granted before the issuance of the impugned order. The petitioner expressed readiness to remit 5% of the disputed tax demand as a condition for remand.
Issue 2: Absence of notice in Form ASMT 10 The petitioner argued that the intimation and show cause notice were issued without a prior notice in Form ASMT 10, which should have been provided before initiating proceedings based on scrutiny of returns. The petitioner emphasized the necessity of such notice to explain any disparities in the returns. Despite opportunities given to contest the tax demand, the petitioner asserted that the tax demand was confirmed without a hearing.
Judgment The Court noted that while the petitioner was offered opportunities to contest the tax demand, the confirmation of the tax demand without a hearing was a procedural lapse. The Court directed the quashing of the impugned assessment order, subject to the condition that the petitioner remits 5% of the disputed tax demand within three weeks. The petitioner was allowed to submit a reply to the show cause notice within the specified period. Upon receipt of the reply and satisfaction of the remittance, the respondent was instructed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within two months.
Conclusion The writ petition was disposed of with the above terms, and connected miscellaneous petitions were closed without any costs imposed.
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