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Case Law Details

Case Name : K. Chandrasekaran Vs TRO (Madras High Court)
Appeal Number : W.P. No. 20231 of 2018 and WMP. Nos.23717 to 23722 of 2018
Date of Judgement/Order : 27/08/2018
Related Assessment Year : 2010-11 and 2011-12
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K. Chandrasekaran Vs TRO (Madras High Court)

The present impugned order is put to challenge mainly on three grounds. The first ground raised is that the petitioner was not put on notice before passing the impugned order. When such contention is specifically raised by the petitioner, it is the duty of the respondent to place the material and satisfy this Court with regard to service of notice. No material is placed before this Court to substantiate the service of such notice to the petitioner, before passing the impugned order. It is only stated in the counter affidavit that the present impugned order was served on the petitioner. However, when the impugned order referred to the issuance of a show cause notice to the petitioner, proving such service of notice is on the respondent, which in my considered view, they miserably failed. Therefore, solely on the ground of violation of principles of natural justice, the impugned order has to go.

Secondly, the petitioner contended that the assessment order itself was set aside by the Tribunal and in the absence of any fresh order of assessment, the question of making a demand does not arise. Though the revenue sought to contend in their counter affidavit that only certain issues were remitted back to the Assessing Officer for examination by not setting aside the assessment order, this Court is not convinced on such contention.

 A bare perusal of the order passed by the Tribunal would clearly indicate that it has set aside the assessment order itself and remitted the matter back to the file of the Assessing Officer. Therefore, it is not correct to say that the impugned demand is valid even in the absence of any fresh assessment order passed by the Assessing Officer in pursuant to such remand. Therefore, I find force in the submission made by the learned counsel for the petitioner that in the absence of any fresh order of assessment, the impugned demand cannot be sustained. Therefore, on this ground also, this Court is inclined to interfere with the impugned proceedings.

 Insofar as the third issue, namely, maintainability of the proceedings under Section 179 against the petitioner, a Director in a Public Limited Company, is concerned, this Court is not inclined to go into such issue as this Court is satisfied to set aside the impugned order on the above said other two grounds. Moreover only when an order of assessment is passed, issuance of demand would arise. Only when a demand is made preceded by an assessment, the question of considering the validity of such demand issued under Section 179 of the said Act would arise. As this Court finds that such situation has not arisen in this case, it is not necessary to go into the third issue touching upon the maintainability of demand under section 179 of the said Act and give any finding on the same. However, the said third issue is left open to be agitated by the respective parties in an appropriate proceedings at the appropriate time.

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