Denial of reasonable opportunity through unlawful withholding of account books vitiates assessment and requires fresh proceedings

Retention of an assessee's account books without lawful authority, and limiting inspection before assessment, amounted to denial of reasonable opportunity. The assessing authority could not rely on the seizure provisions because the books had not been seized by a written order recording reasons under the relevant provision. As the assessee and auditor were prevented from effective inspection and from placing objections to the proposed assessment, the assessment orders were unsustainable and were quashed; the authority was directed to return the account books and was left free to proceed afresh in accordance with law.

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Issues: Whether the assessment orders were vitiated for denial of reasonable opportunity on account of the withholding of the assessee's account books and the restriction of inspection to office hours before the proposed assessment.

Analysis: The account books were retained by the assessing authority without any shown power to do so, and the seizure provisions under section 17(2A) of the General Sales Tax Act, 1125 were inapplicable because the books had not been seized under that provision by a written order recording reasons. The assessee and his auditor were thus not given a fair chance to inspect the books themselves and place effective objections to the proposed assessment. Such withholding of the books deprived the assessee of a proper opportunity to show cause.

Conclusion: The assessment orders were unsustainable and were quashed. The authority was also directed to return the account books, and remained free to proceed afresh in accordance with law.

Ratio Decidendi: Retention of an assessee's account books without lawful authority, resulting in denial of effective inspection and objection before assessment, amounts to denial of reasonable opportunity and invalidates the assessment.

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