Proper service of reassessment notice is mandatory; ex parte tax assessment fails where hearing notice is not duly proved served.

An ex parte reassessment cannot be sustained unless the hearing notice is duly served in the manner required by law. The assessee's affidavit denying tender or refusal of the notice remained uncontroverted, and there was no reliable material to disbelieve it. The Court held that the First Appellate Authority should not have rejected the service objection, especially because the Assessing Authority did not send notice by registered post to the firm's recorded address before proceeding ex parte. The reassessment was therefore vitiated for breach of natural justice, and the assessment orders were quashed with a direction for fresh reassessment after proper notice.

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Issues: Whether the ex parte reassessment order could be sustained when the notice for the remand proceedings was not proved to have been served on the assessee and the statutory requirement of proper service was not followed.

Analysis: The objection to service turned on the notice dated 21.5.1999 fixing 26.5.1999. The affidavit of the partner denying tender and refusal of notice remained uncontroverted, and there was no material to disbelieve that statement. The Court held that, in the absence of reliable proof of service, the First Appellate Authority ought not to have rejected the objection. It further noted that before proceeding ex parte the Assessing Authority was required to send notice by registered post at the recorded address of the firm, which was not done. The reassessment was thus made without compliance with the requirement of fair hearing.

Conclusion: The ex parte reassessment proceedings were invalid and the consequential orders of the First Appellate Authority and the Tribunal could not stand.

Final Conclusion: The assessment orders were quashed and the matter was sent back for fresh reassessment in accordance with the earlier remand directions and after proper notice to the assessee.

Ratio Decidendi: An ex parte tax assessment cannot be sustained unless notice of the hearing is duly served in the manner required by law, and failure to give such notice vitiates the assessment for breach of natural justice.

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