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IN THE HIGH COURT OF ORISSA AT CUTTACK
S. Muralidhar, M.S.Raman, JJ.
Md. Quazzafi – Appellant
Versus
State of Odisha & Ors. – Respondents
Writ Petition (C) No. 3544 of 2018
Decided On : 16-01-2023
Demand Notice - Challenge to Demand Notice - The court directed the impugned demand notice to be treated as notice on the Petitioner and allowed the Petitioner to file a reply within a specified period. The State Government was directed to decide on the reply in accordance with the law and communicate the decision to the Petitioner within a specified timeframe. No recovery was to be made from the Petitioner until the decision was communicated.
Fact of the Case:
The Petitioner challenged the demand notices issued by the Government based on audit objection, citing lack of due procedure.
Finding of the Court:
The court directed the impugned demand notice to be treated as notice on the Petitioner and allowed the Petitioner to file a reply within a specified period. The State Government was directed to decide on the reply in accordance with the law and communicate the decision to the Petitioner within a specified timeframe. No recovery was to be made from the Petitioner until the decision was communicated. The court made it clear that it had not expressed any opinion on the merits of the case.
Issues: Challenge to demand notices issued by the Government without following due procedure of law.
Ratio Decidendi: The court directed the Government to follow due procedure and provide the Petitioner with an opportunity to respond to the demand notice before making any recovery.
Final Decision: The writ petition was disposed of with the direction for the Government to treat the demand notice as notice on the Petitioner, allow the Petitioner to file a reply, and refrain from making any recovery until the decision was communicated. The court clarified that it had not expressed any opinion on the merits of the case.
JUDGMENT
1. The Petitioner has challenged the demand notices dated 26th October, 2017 (Annexure-3), whereby the Government has raised the demand on the basis of audit objection.
2. From the record, it is seen that the impugned demand notice was issued without following the due procedure of law.
3. In that view of the matter, it is directed that the impugned demand notice (Annexure-3) be treated as notice on the Petitioner and it will be open to the Petitioner to file a reply to the said demand notice within a period of two weeks hence before the Opposite Party-Government. If such reply is filed by the Petitioner along with certified copy of this order, the State Government will decide the same in accordance with law and pass a reasoned order not later than 13th February, 2023, preferably after hearing the Petitioner, and the decision be communicated to the Petitioner not later than 20th February, 2023. Till then, no recovery will be made from the Petitioner. If the Petitioner is aggrieved by such decision, it will be open to him to seek appropriate remedies in accordance with law.
4. The writ petition is disposed of in the above terms.
5. It is made clear that this Court has not expressed any opinion on the merits of the case.
6. An urgent certified copy of this order be issued as per rules.
The court emphasized the importance of following due procedure and providing the Petitioner with an opportunity to respond to the demand notice before making any recovery.
Writ petition premature without exhausting statutory remedies like reply and appeal to Debts Recovery Tribunal.
The Court held that a demand notice must provide an opportunity for a hearing before enforcement.
A tax assessment order may be set aside and remanded for fresh consideration when issued in violation of natural justice, provided the taxpayer agrees to pay a portion of the disputed tax as a condit....
An opportunity to be heard should be afforded after the noticee has filed a reply, and the noticee should be permitted to place their stand on record before being afforded a hearing.
The court remitted the case for a fresh order, necessitating due process and compliance to ensure fairness in tax-related decisions.
Delayed adjudication of stale show cause notices is bad in law and violates procedural fairness and the principles of natural justice.
Violation of principles of natural justice by not affording the petitioner an opportunity to defend against the allegations before passing the recovery order.
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