Natural justice in reassessment: denial of relied-on report and hearing before adverse assessment vitiated the order.

Where objections to a pre-assessment notice are rejected on merits, the assessee must be given a personal hearing before an adverse assessment is finalised, especially when the department relies on an external verification report. Denial of the relied-on report and failure to afford a hearing constituted a breach of natural justice and the fairness requirement under section 17(3) of the Kerala General Sales Tax Act, 1963. The court held that the availability of an alternate remedy did not preclude writ intervention because the violation was patent. The assessment order was quashed and the matter remitted for fresh assessment after hearing the petitioner.

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Issues: Whether the assessment order was vitiated for denial of a copy of the relied-on verification report and for failure to afford a personal hearing after the objections to the pre-assessment notice were rejected on merits.

Analysis: The assessment authority not only rejected the objections as unsigned but also proceeded to consider and reject them on merits. Once the objections were dealt with on merits, the assessee was entitled to a hearing before an adverse assessment was finalized, particularly where the order was based on a report relied on by the department. The denial of an opportunity of hearing amounted to a breach of the principles of natural justice and of the statutory fairness requirement reflected in section 17(3) of the Kerala General Sales Tax Act, 1963. The availability of an alternate remedy did not bar writ intervention because the breach was patent.

Conclusion: The assessment order was quashed, and the matter was remitted for fresh assessment after affording the petitioner an opportunity of being heard.

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