Ex parte tax adjudication remanded for fresh reply and merits hearing, with conditional compliance terms retained.

Ex parte adjudication under section 73 may be remitted where the assessee is denied an effective opportunity to reply and place material before the authority. The Karnataka HC, on the facts described, set aside the impugned orders and directed fresh adjudication from the stage of the show-cause reply, treating the petitioner's request for reconsideration as justified. The remand was made subject to compliance with terms requiring payment of 10% of the demanded tax in the specified orders, so the demand was not extinguished but kept open for reconsideration on merits.

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Issues: Whether the ex parte adjudication orders passed under section 73 should be set aside and the matter remitted for fresh adjudication after granting the petitioner an opportunity to file a reply and contest the demand.

Analysis: The impugned orders were passed ex parte. The petitioner sought an opportunity to respond to the show-cause notice and to place material before the adjudicating authority, while the revenue relied on the recorded service of notice and the non-participation of the petitioner. In view of the petitioner's assertion that the matter required reconsideration on facts and that the alleged lapse in replying was bona fide, the Court found it appropriate to remit the matter for reconsideration. The matter was directed to be taken up from the stage of reply to the show-cause notice, and the petitioner was directed to comply with terms by paying 10% of the demand in respect of the relevant orders.

Conclusion: The ex parte adjudication orders were set aside and the proceedings were remitted for fresh adjudication with an opportunity to reply, subject to payment of 10% of the demanded tax in the specified orders.

Final Conclusion: The petitioner obtained a remand for reconsideration and a fresh opportunity to contest the assessment, while the demands were not wiped out and limited monetary terms were imposed.

Ratio Decidendi: Where adjudication is ex parte and the assessee asserts a need to place material before the authority, the matter may be remitted for reconsideration from the stage of reply so that the dispute is decided after giving an effective opportunity to contest the show-cause notice.

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