Pre-show-cause notice consultation required absent fraud or suppression, with the merits remanded for fresh Tribunal consideration.

Pre-show-cause notice consultation was treated as necessary where the demand case was not shown to involve fraud, collusion, wilful misstatement, suppression of facts, or other evasion-linked conduct. In that setting, the Tribunal order was set aside and the matter was remanded for fresh consideration on the merits. The underlying factual dispute, including the evidentiary value of Form 26AS data and the supporting invoices and work orders, was left open for reappraisal by the Tribunal.

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Issues: Whether the impugned order of the Tribunal was required to be set aside and the matter remanded for fresh consideration on merits in view of the objection regarding pre-show-cause notice consultation.

Analysis: The demand arose from a show cause notice issued under the Finance Act, 1994 and was adjudicated before the issuance of the subsequent clarification in the departmental circular governing pre-show-cause notice consultation. The record did not disclose that the notice was founded on fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade duty, which are the situations in which consultation was treated as not mandatory. The dispute on the merits, including the evidentiary value of Form 26AS data and the underlying invoices and work orders, was not finally decided and was considered more appropriate for reconsideration by the Tribunal.

Conclusion: The impugned Tribunal order was set aside and the matter was remanded to the Tribunal for a fresh decision on the merits.

Final Conclusion: The proceeding ended with a remand for merits determination, and the substantive tax liability was left open for fresh adjudication.

Ratio Decidendi: Where a demand case is not shown to fall within the stated exceptions of fraud, collusion, wilful misstatement, suppression, or similar evasion-linked grounds, the requirement of pre-show-cause notice consultation cannot be ignored, and a merits decision may be set aside for fresh consideration.

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