Natural justice breach voided rubber cess assessment, while inclusion in purchase turnover was sustained.

Rubber cess paid on purchases was treated as part of the purchase turnover for sales tax purposes because it formed part of the price of rubber bought by the dealer, so that inclusion was sustained. However, assessment orders were passed before the time granted for objections expired and before the assessee could place material on actual cess paid, making the estimated levy arbitrary and vitiated by breach of natural justice. The writ court held that such a void assessment could be challenged despite available statutory appeals or revision, and quashed the orders only on the natural justice ground, directing fresh assessment after hearing the assessee.

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Issues: (i) Whether rubber cess paid by the assessee formed part of the purchase turnover of rubber for sales tax assessment purposes; (ii) Whether the assessment orders were vitiated for violation of the principles of natural justice and whether the availability of statutory appellate remedies barred relief under article 226.

Issue (i): Whether rubber cess paid by the assessee formed part of the purchase turnover of rubber for sales tax assessment purposes.

Analysis: The assessment was treated as one made under the charging provision governing purchases of rubber. The Court relied on the view that rubber cess paid is part of the price of rubber purchased and therefore enters the purchase turnover of the buying dealer. In view of that settled position, the challenge to inclusion of rubber cess in the taxable turnover was not accepted.

Conclusion: The inclusion of rubber cess in the purchase turnover was upheld and this contention failed against the assessee.

Issue (ii): Whether the assessment orders were vitiated for violation of the principles of natural justice and whether the availability of statutory appellate remedies barred relief under article 226.

Analysis: The pre-assessment notices granted time to object, but the assessment orders were passed before that time expired and before the assessee could furnish particulars of the actual cess paid. The resulting assessment on an estimated cess equal to the purchase value of rubber was found arbitrary. Since a taxing authority acts quasi-judicially and must comply with natural justice, the breach rendered the orders void. In such a case, the existence of appeal, second appeal, or revision did not prevent exercise of writ jurisdiction.

Conclusion: The assessment orders were quashed insofar as they related to rubber cess, and fresh assessment was directed after giving the assessee an opportunity of hearing.

Final Conclusion: The assessee succeeded only on the natural justice challenge, while the inclusion of rubber cess in purchase turnover was sustained; the matter was sent back for fresh assessment on that limited aspect.

Ratio Decidendi: An assessment order passed before expiry of the time allowed for objections and without an effective opportunity to furnish material is void for breach of natural justice, and the availability of statutory appellate remedies does not bar writ relief against such a void order.

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