Open remand on penalty invocation: reconsideration required on limitation objections and whether penalty was legally invocable.

A remand confined only to penalty was found inadequate where the challenge went to the very basis of penalty invocation, including the impact of a time-barred demand. The tribunal held that the original authority had to reconsider not just the mechanics of penalty but all objections raised by the appellants, including whether the penalty provision was invocable on the facts and whether limitation affected the demand. The limited remand was therefore modified into an open remand, and the matter was sent back for fresh consideration of the penalty issue on all relevant grounds, with full opportunity to the appellants to contest penalty liability.

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Issues: Whether the remand order directing the original authority to impose penalty should be confined to penalty alone or should be an open remand permitting reconsideration of the entire question of imposition of penalty, including the effect of the time-bar on the demand.

Analysis: The challenge was not merely to the quantum or mechanics of penalty but to the very basis of invoking penalty in the facts and circumstances of the case. A direction to impose penalty without examining the appellants' objection on the availability of the penalty provision and the impact of the time-barred demand was held to be inappropriate. The matter was therefore fit for reconsideration by the original authority on all aspects urged by the appellants, with full opportunity to establish that penalty was not invocable.

Conclusion: The limited remand was modified into an open remand and the matter was sent back for fresh consideration of the penalty issue on all relevant grounds. The result was in favour of the appellant to that extent.

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