Assessment order quashed for breach of interim restraint; matter remitted for fresh decision after notice and hearing.

An assessment order passed during the subsistence of an interim restraint order was treated as unsustainable in law and set aside. The respondents accepted that the order could not stand and undertook to proceed afresh after issuing notice, considering the reply, granting a personal hearing, and taking judicial pronouncements into account. The matter was remitted for fresh decision in accordance with law, while the underlying taxability controversy was left open for adjudication on merits. The operative effect was annulment of the impugned assessment and a direction to decide the issue again after observance of due process.

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Issues: Whether the assessment order dated 31 March 1997 was liable to be quashed and the matter remitted for fresh decision after hearing the petitioners.

Analysis: The assessment order was passed during the subsistence of the interim restraint order. The respondents accepted that the order could not stand and undertook to proceed afresh after issuing notice, considering the reply, granting personal hearing, and taking into account the relevant judicial pronouncements. The Court accordingly treated the impugned order as bad in law and set it aside, leaving the underlying taxability controversy open for fresh adjudication.

Conclusion: The assessment order was quashed and set aside, and the respondents were directed to decide the matter afresh in accordance with law after hearing the petitioners.

Final Conclusion: The proceedings ended with the impugned assessment annulled and the dispute remitted for reconsideration on merits, without any adjudication on the substantive tax issue.

Ratio Decidendi: An assessment order passed in circumstances rendering it unsustainable may be quashed and the matter remitted for fresh decision after observance of due hearing and lawful procedure, while leaving the substantive controversy open.

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