Natural justice in tax assessment requires consideration of replies and documents; writ remedy was not barred by alternate appeal.

Where assessment proceeds on the mistaken premise that audited accounts were not filed despite admitted production of the audit report and accounts, non-consideration of the reply and supporting documents amounts to a violation of natural justice and an apparent error in the assessment process. The High Court held that merely allowing a reply is insufficient unless the authority actually examines the material placed before it. In these circumstances, the availability of an alternate statutory appeal did not justify relegating the assessee to that remedy. The assessment orders and the order dismissing the writ petition were unsustainable, and the matter was remanded for fresh consideration of the reply and documents.

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Issues: Whether the writ petition ought to have been entertained despite the availability of an alternate statutory appeal, and whether the assessment orders were vitiated for non-consideration of the audit report and reply, amounting to violation of natural justice and error apparent on the face of the record.

Analysis: The audit report in form VAT-240 and the accounts produced by the assessee were admitted to have been filed, and they had not been rejected by the assessing authority. Yet the assessment proceeded on the premise that the audited balance sheet had not been filed and applied rule 3(2)(m) of the Karnataka Value Added Tax Rules, 2005. Such an approach showed non-consideration of the material submitted in response to the notice. Merely permitting a reply is insufficient unless the authority considers the reply and accompanying documents. In these circumstances, relegating the assessee to the alternate remedy was not justified.

Conclusion: The assessment orders and the order dismissing the writ petition were unsustainable, and the matter had to be remanded for fresh consideration after examining the reply and documents.

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