HC Set-Aside Order Confirming Tax Liability as It Was Passed Without Considering Assessee’s Response to Inspection Report

Case Details: Krishna Iron & Steen Company v. Assistant Commissioner (ST) - [2024] 165 taxmann.com 742 (Madras)

Judiciary and Counsel Details

• Senthilkumar Ramamoorthy, J.

Facts of the Case

The petitioner was engaged in the business of iron and steel. The department conducted inspection and issued show cause notice. After receiving the response, the department passed the order. It filed writ petition against the demand order and contended that the response given during inspection was not considered and order contained computational errors.

High Court Held

The Honorable High Court noted that the petitioner’s responses during inspection were not mentioned in impugned order and the tax proposals were confirmed without establishing necessary ingredients. Also, a grave computational error was found in one assessment year.

Therefore, the Court held that the impugned orders were liable to be set aside and the petitioner was directed to remit 5% of disputed tax demand for each defect. The Court also directed the department to provide reasonable opportunity including personal hearing and pass fresh orders within 3 months.