Foundational show-cause notice quashed: subsequent order could not survive and was set aside, with liberty for fresh action.

An order founded on a show-cause notice and an earlier consequential order that had already been quashed could not survive judicial scrutiny. Once the foundational notice and the prior order ceased to exist in law, the subsequent order lacked legal support and was unsustainable. The court therefore set aside the impugned order in favour of the assessee, while preserving the respondents' liberty to take fresh action in accordance with law.

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Issues: Whether an order founded on a show-cause notice and earlier order that had already been quashed could survive judicial scrutiny.

Analysis: The impugned order was passed on the basis of a show-cause notice that had already been set aside in the earlier round. Once the foundational notice and the earlier consequential order ceased to exist in law, the subsequent order could not be sustained. The reserved liberty of the revenue to proceed in accordance with law did not save the impugned order itself.

Conclusion: The impugned order was set aside in favour of the assessee, with liberty reserved to the respondents to take fresh action in accordance with law.

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