Reasonable opportunity of hearing led to setting aside a tax demand, with remand after a conditional deposit and fresh hearing.

A demand order was set aside because the taxpayer had not been given a reasonable opportunity of hearing before finalisation, even though the non-response to notices was noted. The court directed the taxpayer to deposit 10% of the disputed demand, permitted a reply to the show-cause notice, and required the authority to reconsider the matter afresh after granting a personal hearing. The bank attachment was raised as a consequence of the demand order being set aside.

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Issues: Whether the tax demand order was liable to be set aside for denial of a reasonable opportunity of hearing and, if so, the consequential relief.

Analysis: The petitioner had not been heard before the impugned demand order was issued. The Court noted that this was linked to the petitioner's failure to respond to the notices, but the absence of hearing before finalisation of the demand warranted interference. The petitioner was therefore required to remit 10% of the disputed tax demand and was permitted to file a reply to the show cause notice, after which the authority was to reconsider the matter and afford a personal hearing before passing a fresh order. The bank attachment was also raised as a consequence of setting aside the demand order.

Conclusion: The demand order was set aside and the matter was remanded for fresh consideration after compliance with the imposed condition and grant of a reasonable opportunity of hearing.

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