Tax Demand Partially Upheld: Petitioner Ordered to Pay 15% While Challenging Assessment with Procedural Safeguards and Fresh Hearing Opportunity

HC allowed the writ petition challenging tax demand, finding procedural irregularities. The court remanded the matter to tax authorities, directing petitioner to pay 15% of disputed tax and providing an opportunity to contest the demand. The original order was set aside, with instructions for a fresh hearing and order within three months, without imposing costs.

---

---

Issues involved:
Challenge to tax demand on grounds of lack of reasonable opportunity for contesting, rejection of appeal on limitation grounds, non-participation due to lack of awareness of proceedings, remand for reconsideration with conditions.

Analysis:

1. The petitioner challenged an order in original and an appellate order, claiming they did not have a fair opportunity to contest the tax demand. The petitioner alleged that their Accountant failed to inform them about the proceedings, leading to the filing of the writ petition.

2. During the Covid-19 pandemic, the petitioner did not conduct business and filed nil returns. Upon learning of the original order, an appeal was filed, which was rejected due to limitations. The petitioner agreed to pay 10% of the disputed tax demand during the appeal and offered an additional 5% for remand to the original authority.

3. The Additional Government Pleader confirmed that various notices were issued to the petitioner, including Form ASMT 10, a show cause notice, and a personal hearing notice. These notices indicated attempts to inform the petitioner about the proceedings.

4. The impugned order related to two e-way bills not reported in GSTR 1 statements. The tax proposal was confirmed as the petitioner did not respond to the show cause notice. Considering the petitioner's claim of non-awareness of proceedings, the court decided to provide an opportunity to the petitioner with certain conditions.

5. The court set aside the challenged orders and remanded the matter for reconsideration, requiring the petitioner to pay an additional 5% of the disputed tax demand within two weeks. The petitioner was allowed to respond to the show cause notice within this period. Upon receipt of the response and confirmation of payment, the second respondent was directed to provide a fair opportunity to the petitioner, including a personal hearing, and issue a fresh order within three months.

6. The writ petition was disposed of based on the above terms, with no costs imposed. Consequently, the related miscellaneous petition was closed as well.

---