Proper service of notice before assessment is essential; affixation alone and ex parte tax liability were held unlawful.

Service of notice must comply with the prescribed mode before tax liability can be fastened, and affixation cannot be used at the outset when the authority knows the assessee's correct location or that the named firm has ceased to exist. The text further notes that an ex parte assessment made without proper notice and hearing, followed by an unauthorised alteration of the assessment order to add the petitioner's name, is contrary to the service rules and basic fairness. On that basis, the assessment order and notice of demand were treated as without authority of law and liable to be quashed, with further proceedings restrained.

---

---

Issues: Whether the assessment order and notice of demand were liable to be quashed for failure to serve notice in the manner prescribed and for making the assessment against a defunct firm by affixation alone.

Analysis: The notice under section 21 was issued in the name of a firm which had ceased to exist, although the authority knew that the business had shifted and that the relevant office was at Rewa. Rule 77 required service by registered post before resorting to affixation, but the notices were affixed at the very outset without complying with the prescribed mode of service. The assessment was then made ex parte and the officer attempted to add the petitioner's name after the assessment by merely altering the order, which was not sanctioned by law. Tax liability cannot be fastened without proper notice and an opportunity of hearing, and the procedure adopted was contrary to the rules and to basic fairness.

Conclusion: The assessment order and notice of demand were without authority of law and were liable to be quashed, and further proceedings against the petitioner were restrained.

---