Natural justice in reassessment: failure to grant a fair hearing rendered the reassessment and demand notice unsustainable.

Reassessment under the Karnataka Sales Tax Act, 1957 must be completed after giving the assessee a fair and reasonable opportunity of hearing and proper consideration of any request for personal hearing or additional time. Where the reassessment order shows that such a request was not meaningfully considered and the authority proceeded without a proper enquiry, the order and consequential demand notice are unsustainable. The matter may be remitted for fresh consideration after notice and opportunity to the assessee, leaving the substantive tax issue open for lawful adjudication.

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Issues: Whether the reassessment order and consequential demand notice were liable to be set aside for want of reasonable opportunity of hearing and non-compliance with natural justice.

Analysis: The impugned reassessment was passed after the assessee had specifically sought personal hearing and additional time through counsel. The order itself showed that the request for hearing was not meaningfully considered and the authority proceeded on the basis that no other issue was pressed. In the circumstances, the authority failed to conduct a proper enquiry and did not afford a fair and reasonable opportunity before completing reassessment under Section 12-A of the Karnataka Sales Tax Act, 1957.

Conclusion: The reassessment order and consequential demand notice were unsustainable and were set aside. The matter was remitted to the competent authority for fresh consideration after issuing notice and affording opportunity to the assessee.

Final Conclusion: The decision grants relief to the assessee on the procedural fairness ground, while leaving the tax liability open for fresh adjudication in accordance with law.

Ratio Decidendi: An order of reassessment cannot be sustained when passed without affording a reasonable opportunity of hearing and fair enquiry to the affected assessee.

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