Violation of natural justice warrants remand of tax assessment subject to additional pre-deposit of disputed tax.

The petitioner challenged an Original Order (Form DRC-07) dated 25.02.2025 and an Appeal Order (Form GST APL-02) dated 27.01.2026

The petitioner contended that these orders were passed in violation of the principles of natural justice as they were issued without providing the petitioner a hearing

Although the writ petition was filed shortly after the expiry of the limitation period, the petitioner offered to remit a portion of the disputed tax demand to facilitate a remand of the matter for fresh consideration

1. Whether the impugned assessment and appellate orders are liable to be set aside due to a breach of the principles of natural justice

2. Whether the court should exercise its discretionary jurisdiction under Article 226 of the Constitution to remand the matter for re-consideration subject to a conditional deposit

Natural Justice (Audi Alteram Partem), which require that a party be given a reasonable opportunity to be heard before an adverse order is passed

Article 226 of the Constitution of India, which grants High Courts the power to issue writs for the enforcement of fundamental or legal rights

The principle of Conditional Remand, where a party seeking the reopening of an assessment after expiry of limitation may be required to deposit a percentage of the disputed tax to prove bona fides

The Court observed from the records that the petitioner was not afforded a hearing before the issuance of the impugned orders

Recognizing this procedural infirmity, the Court took note of the petitioner's voluntary undertaking to remit 25% of the disputed tax demand (inclusive of the 10% already pre-deposited during the appellate stage)

By linking the setting aside of the orders to this financial condition, the Court balanced the petitioner’s right to a fair hearing with the revenue's interest, especially since the limitation period for statutory remedies had recently expired

The Court determined that a remand was necessary to rectify the breach of natural justice, provided the revenue was protected by the additional deposit

The holding was made subject to the condition that the petitioner remits 25% of the disputed tax demand (after crediting the 10% already deposited) within 30 days of receipt of the order

Upon such remittance, the respondent is directed to provide a reasonable opportunity to the petitioner and issue a fresh order within three months

The writ petition was disposed of with no order as to costs