Fair opportunity in disputed input tax credit demands led to setting aside and remand for fresh adjudication.

An assessment order demanding tax on alleged wrongful input tax credit was set aside because the affected party had not been given a fair and reasonable opportunity to contest the demand on merits. Although notice and show cause proceedings had been initiated, the court noted that a fresh reply and personal hearing were necessary, especially where part of the disputed demand had already been recovered from the bank account. The matter was remanded for fresh adjudication after permitting a reply and hearing.

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Issues: Whether the assessment order demanding tax on alleged wrongful availment of input tax credit could be sustained when the petitioner claimed absence of a reasonable opportunity to contest the demand.

Analysis: The impugned order was preceded by notice and show cause proceedings, but the petitioner was permitted to contest the tax demand on merits after a fresh reply. The documents showed that part of the disputed demand had already been appropriated from the bank account, and the matter warranted reconsideration after affording a reasonable opportunity, including a personal hearing.

Conclusion: The assessment order was set aside and the matter was remanded for fresh adjudication after granting the petitioner an opportunity to file a reply and to be heard.

Final Conclusion: The petitioner obtained relief by way of setting aside of the impugned order, restoration of the attachment issue to the outcome of the remanded proceedings, and a direction for fresh decision on merits.

Ratio Decidendi: An assessment order founded on disputed tax liability should be set aside and remitted when the affected person has not been afforded a fair and reasonable opportunity to contest the demand on merits.

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