Natural justice and purchase turnover disputes: rubber cess was includible, but premature assessment orders were quashed.

Rubber cess paid was treated as part of the price of rubber purchased and therefore included in purchase turnover under the Kerala General Sales Tax Act; the challenge to that inclusion was rejected. An assessment made before expiry of the time granted for objections, and without a real opportunity to furnish particulars, was held to violate natural justice and be void; the existence of appeal or revision remedies did not bar writ relief. The impugned assessments were set aside and remitted for fresh assessment after hearing the assessee.

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Issues: (i) Whether rubber cess paid formed part of the purchase turnover liable to sales tax under the Kerala General Sales Tax Act. (ii) Whether the assessment orders were vitiated for breach of natural justice and whether the existence of statutory appellate remedies barred writ relief.

Issue (i): Whether rubber cess paid formed part of the purchase turnover liable to sales tax under the Kerala General Sales Tax Act.

Analysis: The challenge to the validity of the levy was not pressed in view of the statutory scheme and the existing binding decision that rubber cess paid is part of the price of rubber purchased and therefore forms part of the purchase turnover of the purchasing dealer.

Conclusion: The contention that rubber cess could not be included in the purchase turnover was rejected.

Issue (ii): Whether the assessment orders were vitiated for breach of natural justice and whether the existence of statutory appellate remedies barred writ relief.

Analysis: The assessing authority passed the assessment orders before the time granted in the pre-assessment notices for filing objections had expired and before the assessee had an effective opportunity to furnish particulars of the rubber cess paid. The estimate of cess was also found to be arbitrary. An assessment made in violation of natural justice is void, and the availability of appeal or revision does not bar certiorari where the order itself is void for such breach.

Conclusion: The assessment orders were liable to be quashed for violation of natural justice, and the alternative remedy objection was rejected.

Final Conclusion: The writ petition succeeded to the extent that the impugned assessments were set aside on the ground of procedural unfairness, and the matter was sent back for fresh assessment after giving the assessee an opportunity of hearing.

Ratio Decidendi: An assessment order made before expiry of the time allowed for objections, thereby denying a real opportunity of hearing, is void for breach of natural justice and can be quashed under article 226 notwithstanding statutory remedies of appeal or revision.

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