Natural justice in trade tax proceedings requires a fair hearing; an order passed on inadequate notice was set aside.

An adverse order in trade tax proceedings was set aside because the assessee was not given a fair and effective opportunity of hearing. Although proceedings had been initiated after completion of assessment under Section 21 of the U.P. Trade Tax Act, the hearing notice was received only late on the previous evening and a short adjournment was refused. In these circumstances, the requirement of natural justice was not satisfied. The respondents were permitted to pass a fresh order after granting an opportunity of hearing in accordance with law.

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Issues: Whether the impugned order was liable to be set aside for breach of natural justice on account of inadequate opportunity of hearing before passing the order under the trade tax proceedings.

Analysis: The assessment had already been completed, and thereafter proceedings were initiated under Section 21 of the U.P. Trade Tax Act. The notice fixing the matter for hearing was received late in the evening on the previous day, and only a very short time was afforded for appearance. The request for a short adjournment was refused. In these circumstances, the requirement of fairness in decision-making was not satisfied, because at least a short and effective opportunity ought to have been granted before the adverse order was made.

Conclusion: The order dated 31 March 2000 was set aside for violation of principles of natural justice, and the respondents were left at liberty to pass a fresh order after giving the petitioner an opportunity of hearing in accordance with law.

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