SCN Reply Inadequate and Hearing Skipped: Madras HC dismisses Petition granting Liberty to file Statutory Appeal [Read Order]

The petitioner, Malathy Constructions argued that a show cause notice (SCN) was issued on 22.05.2024, to which a reply had been filed on 07.06.2024. It was submitted that the petitioner was not given adequate opportunity to present its case, and hence, requested the Court to set aside the impugned assessment and allow another opportunity to submit a detailed reply and attend a hearing.

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On the other hand, the government counsel submitted that the department had provided three opportunities for a personal hearing via notices dated 04.07.2024, 12.07.2024, and 23.07.2024, but the petitioner failed to attend any of them.

It was also submitted that the reply submitted by the petitioner was inadequate and hence rejected. Therefore, the assessment order was passed in accordance with law, without violating principles of natural justice.

JusticeKrishnan Ramasamy observed that since the petitioner was given sufficient opportunities, including multiple personal hearings, there was no procedural violation. The Court found the reply to the SCN neither effective nor substantial, and held that the assessment order did not warrant interference.

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However, considering the petitioner’s willingness to file an appeal and restrict the relief sought, the High Court allowed the petitioner to pursue the appellate remedy. It granted liberty to file an appeal within 30 days from the receipt of the order, subject to payment of 20% of the disputed tax amount (comprising the 10% statutory pre-deposit and an additional 10%).

The Court directed the Appellate Authority to entertain the appeal on its merits without dismissing it on limitation grounds, and to provide the petitioner a fair opportunity of hearing.