Kerala HC upholds tax order dismissal, rejects natural justice violation claim under Section 250 IT Act

Kerala HC upheld dismissal of appellant's writ petition challenging tax order. Court rejected appellant's claim of natural justice violation, finding that proper notices under Section 250 IT Act were issued with adequate hearing opportunities. Despite repeated adjournments granted for document production, appellant failed to submit supporting evidence, using delay tactics instead. HC confirmed that failure to utilize granted opportunities precludes natural justice complaints. However, court modified single judge's requirement for 20% tax deposit as pre-condition for appellate tribunal proceedings.

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Issues:
Violation of Section 250 of the IT Act in issuing Ext.P8 order without a separate notice for hearing.
Alleged lack of opportunity for the appellant to present written submissions and supporting documents.
Contention of malafides and lack of fairness in Ext.P8 order.
Interpretation of notices issued by NFAC under Section 250 of the IT Act.
Appellant's consistent adjournment requests and failure to produce supporting documents.
Validity of the judgment of the learned Single Judge.

Analysis:
The appellant challenged the judgment dismissing the Writ Petition, seeking to quash Ext.P8 order issued by the NFAC and mandamus for personal hearing. The appellant argued a violation of Section 250 of the IT Act due to the absence of a separate notice for hearing before issuing Ext.P8. The respondent contended that the appellant consistently sought adjournments to produce documents without doing so, implying a waiver of rights. The NFAC issued notices requiring written submissions and documents, granting adjournments upon request. The learned Single Judge permitted the appellant to appeal before the Tribunal, directing an expedited process, and stay application upon depositing 20% of assessed tax.

The NFAC issued notices under Section 250 of the IT Act, explicitly stating the purpose and consequences of non-compliance. The appellant repeatedly requested adjournments for document production, but failed to submit any documents despite the opportunities granted. The respondent argued that the appellant's conduct indicated a delay tactic rather than genuine efforts to present evidence. The learned Single Judge's decision was based on the appellant's failure to utilize the opportunities provided for submission of documents and contentions.

The appellant's argument regarding the lack of a separate notice for hearing under Section 250 was deemed unsustainable. The notices issued by NFAC satisfied the requirements of Section 250, clearly indicating the purpose and consequences of non-compliance. The appellant's failure to produce documents despite multiple adjournments indicated a lack of genuine intent. The judgment of the learned Single Judge was upheld, except for the modification of the requirement to deposit 20% of the disputed tax for filing a stay petition before the Appellate Tribunal.

The Court found no reason to interfere with the learned Single Judge's decision, emphasizing the importance of utilizing opportunities to present evidence and submissions. The appellant was directed to file an appeal and stay application within three weeks, with recovery steps suspended until the Tribunal's decision. The judgment was disposed of without costs.

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