demand sustainable or not

[Dalia Felix]

Hai

A Show cause notice was issued on us by invoking sec. 73 (1) of the FA, 1994 (alleging fraud, etc) and ADC confirmed the demand as per the same section. In the appeal stage (comm Appeals), we had argued that sec. 73 (1) can not be rightly invoked against us. The personal hearing at the Commissioner (A) was also completed. Now the ADC has issued a 'corrigendum to the OIO, stating that the demand is confirmed as per section 73(2).  My query is that such an action by the ADC is sustainable at this stage? Also, what is the remedy available to us at this stage? Can any of the practicing members can cite some case laws to support us?

[YAGAY andSUN]

Mentioning the wrong section does not absolve the demand of tax/duty which had been raised on alleging fraud, collusion etc.).  If the Section 73(2) of the Finance Act, 1994 was not mentioned in OIO then ADC can't issue a corrigendum to OIO and confirm the demand.

You can challenge this adjudication order.

[dipsang vadhel]

Yes. I agree with Mr. Pradip khatri.

Mentioning wrong section in adjudication order which has no mention in SCN clearly shows that hearing has been done in predetermined manner.

You can always chellege such order before apporiate authority.

AI Summary

Change of legal basis by corrigendum after adjudication is procedurally contestable; taxpayers can challenge the order on that ground. If a corrigendum to an adjudication order substitutes a different statutory basis that was not cited in the original show-cause notice or adjudication-in-original, issuing that corrigendum at the appeal stage is procedurally suspect and may indicate predetermined hearing; taxpayers can challenge such an adjudication before the appropriate appellate or revisional authority on grounds of procedural impropriety and lack of jurisdiction to alter the basis of liability.