Interest and penalty waiver on royalty-related tax demand led to quashing of an ex parte assessment and remand.

An ex parte assessment order relating to royalty-related tax demand for AY 2020-2021 was challenged only to the extent it levied interest and penalty. The Court treated the case as prima facie covered by the Supreme Court's directions granting waiver of interest and penalty for the relevant period, and found the impugned order unsustainable in that form. The assessment order was quashed and the matter remanded to the first respondent for fresh adjudication in accordance with the governing Supreme Court directions, leaving the tax liability itself to be reconsidered on merits.

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Issues: Whether the ex parte assessment order levying interest and penalty on royalty-related tax demand for assessment year 2020-2021 required interference in view of the Supreme Court's directions on waiver of interest and penalty, and whether the matter should be remanded for fresh adjudication.

Analysis: The petitioner accepted tax liability on royalty charges but challenged the addition of interest and penalty. The Supreme Court's directions in the cited decision provided that levy of interest and penalty on demands for the relevant period would stand waived, and the Court found that the petitioner's case prima facie attracted those directions. As the assessment had been made ex parte and the department was not ready with instructions, the impugned order was found fit to be set aside.

Conclusion: The impugned order was quashed and the matter was remanded to the first respondent for fresh adjudication in accordance with the Supreme Court's directions.

Final Conclusion: The petitioner obtained relief against the ex parte order, but the tax dispute was sent back for reconsideration on merits in the light of the governing Supreme Court ruling.

Ratio Decidendi: Where a demand falls within the period covered by the Supreme Court's conditional waiver directions, interest and penalty cannot be sustained and the matter may be remanded for fresh adjudication.

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