Reasonable notice and prior approval requirements controlled assessment validity, while penalty failed for lack of statutory approval.

A notice period shorter than the usual 30 days may still satisfy the statutory requirement of a reasonable opportunity to be heard if the assessee had prior notice and sufficient time to appear; on those facts, the assessment was upheld. Penalty, however, could not be sustained where the statute made prior approval of the Commissioner a condition precedent and that approval was given only by the Assistant Commissioner. Rule 67 could not override the statutory approval requirement under section 16, so the penalty was set aside while the assessment remained valid.

---

---

Issues: (i) Whether the assessment made under section 11(4) was invalid for want of reasonable notice and opportunity of being heard. (ii) Whether the penalty imposed under section 10(3) was invalid for want of the Commissioner's prior approval under section 16.

Issue (i): Whether the assessment made under section 11(4) was invalid for want of reasonable notice and opportunity of being heard.

Analysis: The notice period must satisfy the statutory requirement of a reasonable opportunity of being heard, and the rule requiring notice ordinarily not less than 30 days is not an inflexible mandate. The petitioner had earlier notice of the assessment proceedings, and the second notice allowed 27 days for appearance. In those circumstances, the opportunity afforded was held to be adequate and not so unreasonable as to justify interference.

Conclusion: The assessment was valid and the challenge to it failed.

Issue (ii): Whether the penalty imposed under section 10(3) was invalid for want of the Commissioner's prior approval under section 16.

Analysis: The penal power under section 10(3) was subject to the proviso to section 16, which required the Commissioner's prior approval. Rule 67 dealt only with one class of defaults under section 10(3), namely failure to furnish returns, and could not displace the statutory requirement under section 16 for both classes of cases. The approval given by the Assistant Commissioner was therefore insufficient to satisfy the statutory condition precedent for imposing penalty.

Conclusion: The penalty was legal authority and was set aside.

Final Conclusion: The assessment was sustained, but the penalty could not stand for want of the statutorily required prior approval, so the petition succeeded only in part.

Ratio Decidendi: Where a statute makes penalty subject to the Commissioner's prior approval, that requirement cannot be satisfied by approval of a delegate unless the delegation itself lawfully authorises compliance with the statutory condition; and a notice period shorter than the ordinary rule is sufficient if, in the circumstances, it still affords a reasonable opportunity of being heard.

---