Natural justice in assessment: denying access to seized books before objections renders the process unfair and unsustainable.

Withholding an assessee's seized account books, documents and loose papers while requiring objections to a proposed assessment denies a reasonable opportunity to respond and breaches natural justice. The assessing authority must first restore access to the materials needed to meet the proposed turnover determination; otherwise any best judgment assessment made on that basis is procedurally unfair. The source states that the resulting assessment orders were invalid and quashed, and that fresh assessments could be made only after return of the seized records.

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Issues: Whether the assessment orders were liable to be quashed for breach of natural justice on account of the withholding of seized account books and connected documents, resulting in denial of a reasonable opportunity to object to the proposed assessments.

Analysis: The assessee's account books, documents and loose papers for the relevant assessment years had been seized and were not returned, yet the assessing authority required him to show cause against the proposed assessments. In these circumstances, the assessee was unable to effectively meet the proposed turnover determinations. The denial of access to the very materials necessary for replying to the proposition notice amounted to denial of a reasonable opportunity and was inconsistent with the principles of natural justice. The best judgment assessments made thereafter were therefore founded on a procedurally unfair process.

Conclusion: The assessment orders were invalid and were quashed. The issue is decided in favour of the assessee.

Final Conclusion: The writ petitions succeeded, the assessment proceedings were set aside, and the revenue was left free to make fresh assessments after returning the seized books and documents.

Ratio Decidendi: Where the assessing authority retains the assessee's books and documents, it cannot require a meaningful objection to a proposed assessment without first restoring access to those materials, since doing so denies a reasonable opportunity and violates natural justice.

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