Tax Assessment Order Quashed: 10% Deposit Required, Fresh Hearing Mandated for Procedural Fairness in Dispute Resolution

HC quashed tax assessment order for assessment year 2018-19, directing petitioner to deposit 10% of disputed tax and file reply within 30 days. Respondent ordered to pass fresh order within two months after hearing petitioner, providing opportunity to contest tax demand. Case remitted for reconsideration on merits, preserving procedural fairness.

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Issues:
Challenge to impugned order dated 29.04.2024 for assessment year 2018-19; Failure to reply to notices preceding impugned order; Claim of settlement of dispute after responding to previous notices; Alternative remedy of appeal before Appellate Commissioner; Petitioner's right to reply and participate in proceedings.

Analysis:
The petitioner approached the High Court challenging the impugned order passed by the respondent confirming the demand proposed in DRC 01 dated 19.03.2024 for the assessment year 2018-19. The petitioner failed to reply to the notices preceding the impugned order and did not participate in the personal hearing. The petitioner claimed that the dispute had been settled after responding to previous notices, but the respondent contended that the petitioner had an alternative remedy by way of an appeal before the Appellate Commissioner under Section 107 of the GST enactments.

After considering the submissions, the Court acknowledged that the petitioner had not responded to the notices preceding the impugned order. However, due to the peculiar circumstances of the case where the demand was earlier dropped but later confirmed, the Court deemed it fair to give the petitioner an opportunity to reply and participate in the proceedings. The Court directed the petitioner to file a reply to the notice in DRC 01 dated 19.03.2024 and deposit 10% of the disputed tax within 30 days from the date of receipt of the order. Upon compliance, the impugned order was set aside, and the case was remitted back to the respondent for fresh orders on merits.

The Court clarified that the impugned order, now quashed, should be treated as an addendum to the show cause notice preceding it. The petitioner was instructed to file a reply within 30 days and make the necessary deposit. The respondent was directed to pass a fresh order expeditiously, preferably within two months, ensuring the petitioner's right to be heard before the order is finalized. The Writ Petition was disposed of with the above directions, without imposing any costs, and connected miscellaneous petitions were closed.

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