Tax Assessment Order Invalidated: Personal Hearing Violation Leads to Mandatory Reassessment with 10% Tax Demand Remittance HC quashed tax assessment order due to lack of personal hearing, directing reassessment with proper opportunity for petitioner. The court mandated ...
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Tax Assessment Order Invalidated: Personal Hearing Violation Leads to Mandatory Reassessment with 10% Tax Demand Remittance
HC quashed tax assessment order due to lack of personal hearing, directing reassessment with proper opportunity for petitioner. The court mandated remittance of 10% disputed tax demand and instructed reassessing officer to provide reasonable hearing within two months, emphasizing principles of natural justice in tax proceedings.
Issues: Challenge to assessment order, Principles of natural justice, Personal hearing, Discrepancies in returns, Barred by limitation
The judgment pertains to a writ petition challenging an assessment order dated 29.12.2023 issued to a civil contractor registered under GST statutes. The petitioner received a notice in Form ASMT-10 alleging discrepancies in returns, followed by a show cause notice in August 2023, to which the petitioner responded in September 2023 with enclosed documents. The assessment order was issued in December 2023, drawing conclusions based on Form 26AS and receipts reflected therein. The petitioner contended that Form 26AS is not indicative of taxable turnover. The petitioner submitted various documents like audited accounts, audit reports, and GST returns. The petitioner argued that no personal hearing was granted, which could have clarified the discrepancies. The petitioner expressed willingness to remit 10% of the disputed tax demand for remand.
The Additional Government Pleader pointed out that principles of natural justice were followed, as a show cause notice was issued, and a personal hearing was offered but not availed by the petitioner. The assessment order confirmed tax liability despite the petitioner's objections regarding Form 26AS. The court noted that the assessment order did not provide a hearing to the petitioner, and it was crucial for justice that the petitioner be heard. Consequently, the assessment order was quashed with the condition that the petitioner remits 10% of the disputed tax demand within two weeks. The assessing officer was directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh assessment order within two months. The petitioner was allowed to submit additional documents as required.
In conclusion, the writ petition was disposed of with no costs, and related motions were closed. The judgment emphasized the importance of providing a fair hearing to the petitioner in tax assessment matters and ensuring compliance with principles of natural justice, ultimately leading to the quashing of the assessment order and a direction for a fresh assessment with proper opportunity for the petitioner to present their case.
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