Natural justice in tax notices requires clear disclosure of the basis for levy before assessment can stand.

A show-cause notice proposing tax under the Andhra Pradesh Value Added Tax Act must disclose the basis and jurisdictional facts for the proposed levy so the assessee can give an effective reply. A notice that merely states that turnover is proposed to be taxed, without explaining the grounds for levy, is vague and breaches audi alteram partem. That defect is not cured by the later assessment order or by the availability of an appellate remedy. The resulting assessment is therefore unsustainable for breach of natural justice and may be quashed, with liberty to issue a fresh notice and decide the matter after hearing objections.

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Issues: Whether the assessment order was liable to be set aside for breach of natural justice because the show-cause notice did not disclose the basis on which the turnover was proposed to be taxed under the Andhra Pradesh Value Added Tax Act.

Analysis: The notice merely stated that the turnover was proposed to be taxed, but did not specify the grounds or jurisdictional facts on the basis of which tax was sought to be levied. A valid notice must be precise, unambiguous, and must apprise the assessee of the case to be met so that an effective reply can be filed. Since the omission went to the root of the opportunity of hearing, the deficiency was not cured by the subsequent assessment order or by the availability of an appellate remedy. The absence of disclosure of the basis for levy violated audi alteram partem and vitiated the proceedings.

Conclusion: The assessment order was unsustainable for breach of natural justice and was liable to be quashed, with liberty to the assessee to file objections and the authority to pass fresh orders after hearing.

Ratio Decidendi: A show-cause notice proposing tax must disclose the basis and jurisdictional facts for the proposed levy so that the assessee gets a fair and effective opportunity to answer the case against it; failure to do so violates natural justice and invalidates the ensuing order.

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