Telangana High Court Quashes Tax Authority's Show Cause Notices To Assessee As Demand Was Settled Under State's One Time Settlement Scheme
6 months, 2 weeks ago

Telangana High Court Quashes Tax Authority's Show Cause Notices To Assessee As Demand Was Settled Under State's One Time Settlement Scheme

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The Telangana High Court recently quashed two show cause notices issued by the tax authority to a company, demanding tax which was already settled under the state government's One Time Settlement scheme, while noting that there was "no allegation of fraud" committed by the company in the notices. A division bench of Justice Sujoy Paul and Justice Namavarapu Rajeshwar Rao in its August 28 order said, that in the "peculiar facts and circumstances of this case", after the petitioner company had availed the One Time Settlement Scheme of the state government, then it was not open for the tax authorities to issue the show cause notice to the petitioner. If we permit the respondents to undertake aforesaid exercise of issuance of show cause notices even after entering into settlement, the very purpose of such scheme will vanish in thin air. Findings On issue of maintainability of the writ petition against show cause notices, the court taking note of the judgments referred to by the respondents said, "However, a plain reading of both the judgments makes it clear that the Supreme Court made it clear that the correctness of allegations/facts cannot be gone into by this Court at the stage of show cause notice".

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