Conditional quashing of assessment order allowed taxpayer to reply, subject to cash deposit and fresh merits review.

The impugned assessment order was conditionally quashed because the taxpayer had not replied to the DRC 01 notice, and the Court directed that the order be treated as an addendum to the show-cause notice. The taxpayer was allowed to file a reply and, on depositing part of the disputed tax in cash within the stipulated time, the authority was required to reconsider the matter on merits after hearing the taxpayer and pass fresh orders. If the conditions were not met, the authority could proceed as if the writ petition had been dismissed.

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Issues: Whether the impugned assessment order was liable to be quashed on terms, with liberty to the authority to pass fresh orders after receipt of the taxpayer's reply to the show-cause notice.

Analysis: The petitioner had not replied to the notice issued in DRC 01, and the demand had been confirmed in the impugned order for the relevant tax period. The Court nevertheless found that the order could be interfered with on terms and directed that the impugned order be treated as an addendum to the show-cause notice, enabling the petitioner to file a reply. Upon compliance with the stipulated deposit of 25% of the disputed tax in cash within the prescribed time, the authority was to reconsider the matter and pass fresh orders on merits after hearing the petitioner. If the conditions were not complied with, the authority was free to proceed as if the writ petition had been dismissed.

Conclusion: The impugned order was quashed conditionally, with the matter left open for fresh adjudication upon compliance with the directions.

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