Natural justice in tax assessment led to setting aside of assessment and penalty orders for inadequate hearing opportunity.

Assessment and penalty orders under the Rajasthan Entertainment and Advertisement Tax Act, 1957 were set aside because the assessee was not given a fair and reasonable opportunity of hearing. The authority had earlier received a detailed reply, but later proceeded on fresh notices without adequately considering that response or ensuring practical access to counsel. The court treated this as a breach of natural justice and remitted the matter for fresh consideration after granting reasonable opportunity to the assessee.

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Issues: Whether the assessment and penalty orders passed under the Rajasthan Entertainment and Advertisement Tax Act, 1957 were liable to be set aside for want of reasonable opportunity and violation of natural justice.

Analysis: The assessee had earlier responded to the notice and the matter had been heard and reserved, but no order was passed and fresh notices were later issued. The assessing authority proceeded without adequately considering the earlier detailed reply and without ensuring that the assessee had a fair opportunity to take the assistance of counsel. In the circumstances, the authority ought to have either accommodated the assessee or fixed the matter at Jaipur where both the assessee's counsel and the office of the authority were situated. The resulting assessment and penalty were therefore inconsistent with fair procedure.

Conclusion: The assessment and penalty orders were rightly set aside for breach of the principles of natural justice, and the matter was remitted to the assessing authority for fresh consideration after granting reasonable opportunity to the petitioner.

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