Tax Assessment Voided: Procedural Flaws Exposed, Personal Hearing Mandated for Fair Reassessment of Case

HC found tax assessment orders invalid due to procedural irregularities. Court set aside ex-parte orders and directed respondent to provide personal hearing to petitioner. Matter remanded for fresh consideration, with petitioner required to file reply within two weeks. No additional conditions imposed, preserving existing bank account attachment.

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Issues:
Challenging mismatch of tax liability for multiple financial years, ex-parte orders passed without affording an opportunity of personal hearing, attachment of bank account, failure to file reply to notice, responsibility of assessee to present case, violation of principles of natural justice.

Analysis:
The petitioner challenged the impugned orders dated 13.09.2023 passed by the respondent, alleging a mismatch of tax liability for the financial years 2017-2018 to 2021-2022. The respondent demanded payment of a differential amount for these assessment periods. The petitioner contended that the respondent issued notices without considering their replies, leading to ex-parte orders. The petitioner's bank account was attached, and a significant sum was transferred without proper communication or physical service of orders. The petitioner sought an opportunity to present their case and participate in the proceedings, emphasizing the lack of notice and personal hearing.

The respondent, represented by the Government Advocate, argued that the petitioner failed to respond to certain notices, resulting in a substantial tax liability. Acknowledging the withdrawal from the petitioner's bank account, the respondent suggested remanding the matter for appropriate orders after verifying the payment. The Court heard both parties and reviewed the submissions and materials on record.

Upon consideration, the Court noted that while the petitioner replied to one notice, they failed to respond to another due to lack of awareness, as the notice was only uploaded online. The petitioner attributed this lapse to their Accountant's failure to appear before the Authority. The Court emphasized the assessee's responsibility to participate in proceedings upon notice issuance. However, recognizing the Accountant's oversight and the violation of natural justice principles, the Court deemed it necessary to grant the petitioner an opportunity for a suitable reply and a personal hearing before the Authority.

Consequently, the Court set aside the impugned orders and remanded the matters to the respondent for fresh consideration for the specified assessment years. No further conditions were imposed due to the amount already withdrawn from the petitioner's bank account. The Court directed the petitioner to file a reply within two weeks, after which the respondent would schedule a personal hearing and pass appropriate orders expeditiously, ensuring compliance with the law and verification of payments. The Court disposed of the Writ Petitions with these directions, without imposing any costs.

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