Fair hearing before tax recovery: demand notice quashed where no reasonable opportunity was given to explain alleged security.

A demand notice for recovery of alleged tax arrears was set aside because it was issued without affording the petitioner a reasonable opportunity to explain his position. The notice was based on an alleged security furnished by the petitioner's father, but the petitioner disputed knowledge of that security and its terms. The Court held that recovery action must comply with the requirement of a fair hearing before coercive steps are taken. The respondents were left at liberty to initiate proceedings afresh after giving the petitioner an opportunity of explanation.

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Issues: Whether the demand notice issued for recovery of alleged tax arrears could be sustained when no reasonable opportunity had been afforded to the petitioner.

Analysis: The notice sought recovery of tax arrears from the petitioner on the basis of an alleged security furnished by his father. The petitioner disputed knowledge of any such security and its terms. The Court found that the demand notice had been issued without providing a reasonable opportunity to the petitioner, attracting the requirement of fair hearing before recovery action is taken.

Conclusion: The demand notice was quashed for violation of the requirement of reasonable opportunity. The respondents were left free to proceed afresh after giving the petitioner an opportunity of explanation.

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