Assessment Order Quashed for Improper Notice; Reassessment Ordered with Opportunity for Objections.

The HC allowed the writ petition, quashing the assessment order due to improper notice and violation of natural justice principles. The court found the respondent's substituted service invalid, as there was no evidence of the petitioner avoiding service. The court exercised its writ jurisdiction under Art. 226, directing a reassessment, allowing the petitioner to submit objections within four weeks. The respondent must conduct the assessment afresh, adhering to legal procedures, without the court expressing any opinion on the case's merits. No costs were imposed, and related motions were closed.

---

---

Issues:
Challenge to assessment order based on improper notice and violation of principles of natural justice.

Analysis:
The writ petition sought to quash an assessment order dated March 31, 2003, primarily on the grounds of improper notice and violation of natural justice. The petitioner argued that the notice was not served personally, depriving them of the opportunity to present further evidence. The respondent, however, justified the affixture of notice under section 282 of the Income-tax Act, 1961, and Order 5, rule 20 of the Civil Procedure Code, stating it was a valid mode of service. The court noted that for substituted service to be valid, there must be a reason to believe the recipient is avoiding service, which was not established in this case. The respondent failed to follow the procedure for substituted service as required by law, leading to a violation of natural justice.

The court referred to the case law of Harbanslal Sahnia v. Indian Oil Corporation Ltd. [2003] 2 SCC 107, highlighting that the High Court can intervene in cases of fundamental rights enforcement, failure of natural justice, or lack of jurisdiction. In this instance, since proper notice was not served, preventing effective participation in the assessment proceedings, the court decided to exercise its writ jurisdiction under article 226 of the Constitution of India. The judgment emphasized the importance of upholding principles of natural justice and ensuring a fair opportunity for the petitioner to present objections.

The court directed the respondent to reassess the proceedings, allowing the petitioner to submit further objections within four weeks. It instructed the respondent to conduct the assessment afresh, considering the objections and passing orders in accordance with the law promptly. The judgment clarified that it did not express any opinion on the merits of the case, leaving the respondent free to make decisions without influence from the court's observations. Ultimately, the writ petition was allowed, with no costs imposed, and related motions were ordered to be closed.

---