Tax cannot be imposed on projected revenue for uncommenced construction based solely on planning approval.

The petitioner challenged the first respondent’s order dated 27 March 2026, which raised a tax demand of ₹5,50,25,100 based on projected revenue, along with ₹2,40,19,438 towards other liabilities.

The petitioner disputed, in particular, the assessment of projected revenue for Block Nos. 12 and 13, contending that construction had not commenced and that the assessment relied only on planning approval.

It also asserted that the order was made without a reasonable opportunity to file a detailed reply.

The petitioner offered to deposit ₹50,00,000 as a condition of remand.

The State submitted that sufficient opportunity had been given.

1. Whether tax could be levied on projected revenue for Block Nos. 12 and 13 when construction had not commenced and planning approval was the stated basis for the projection.

2. Whether the impugned order should be set aside and the matter remanded where the petitioner had sought time to file a detailed reply but claimed it was not afforded sufficient opportunity.

The Court considered the matter under its writ jurisdiction under Article 226, as invoked in the petition.

It applied the principles that an assessment based on projected revenue must have a proper factual basis, and that a party must be afforded a sufficient opportunity to present its defence before an adverse order is made.

No specific statutory provision or precedent was cited in the judgment.

The Court found that construction in Block Nos. 12 and 13 had not commenced; accordingly, it held that levying tax on projected revenue merely because the plans had been approved was improper.

It also found that the petitioner had not been afforded sufficient opportunity to present its defence, particularly after seeking time to file a detailed reply.

In view of these findings and the petitioner’s offer to deposit ₹50,00,000, the Court considered a conditional remand appropriate.

The petitioner must file its reply and supporting documents within four weeks of payment, and the first respondent must consider them, provide a personal hearing, and pass fresh orders on merits and in accordance with law.

Upon proof of payment, the attachment over the petitioner’s and its erstwhile director’s bank accounts must be lifted within one week; if the first respondent does not communicate the lifting within that period, the petitioner may present proof of deposit and the order directly to the banks, which must then de-freeze the accounts.

The writ petition was disposed of without costs.