Ex parte adjudication set aside and tax proceedings remitted from show cause notice stage after denial of reply and hearing.

Ex parte adjudication passed without a reply to the show cause notice or personal hearing was not sustained. The Karnataka High Court, following its earlier order in connected matters, set aside the impugned Order-in-Original and remitted the proceedings for fresh consideration from the show cause notice stage. The petitioner was given liberty to file a fresh reply, and all contentions were left open. The Court also directed that the authorities keep in view the previously identified questions on taxability, exemption, liability and limitation while reconsidering the matter.

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Issues: Whether the impugned Order-in-Original should be set aside and the matter remitted to the stage of show cause notice.

Analysis: The adjudication order was passed ex parte, without a reply to the show cause notice and without availing the opportunity of personal hearing. The Court also relied upon its earlier order in connected matters, which had remitted similar disputes and directed the authorities to keep in mind specified questions relating to taxability, exemption, liability, and limitation while reconsidering the matter. In that backdrop, the impugned adjudication was not sustained and the proceedings were sent back for fresh consideration from the show cause notice stage, with liberty to the petitioner to file a fresh reply and with all contentions kept open.

Conclusion: The impugned Order-in-Original was set aside and the matter was remitted to the authorities for reconsideration from the stage of show cause notice, in favour of the petitioner.

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