Ex parte tax assessment without notice or hearing quashed, with remand for fresh reassessment and limitation relaxation applied.

An ex parte tax assessment made without service of notice or a real opportunity of hearing was held unsustainable, and the assessment order with the consequential demand notice was quashed and remanded for fresh decision. The court treated notice and hearing as essential where substantial tax liability was imposed, while leaving the merits of the transaction open for reassessment. It also held that the statutory limitation relaxation applicable to appellate or revisional orders could apply to the fresh assessment directed in writ proceedings, so the reassessment was to be completed within the stipulated time without a limitation objection.

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Issues: (i) Whether the ex parte assessment order, passed without service of notice or opportunity of hearing, was liable to be quashed and the matter remanded for fresh assessment; (ii) Whether the limitation relaxation in the statute applied to the fresh assessment directed in writ proceedings.

Issue (i): Whether the ex parte assessment order, passed without service of notice or opportunity of hearing, was liable to be quashed and the matter remanded for fresh assessment.

Analysis: The assessment record did not that notice had been served before the assessment was completed ex parte. The Court treated service and hearing as essential where a substantial tax liability had been imposed, and held that the assessee should have been given an effective opportunity to place its case. The merits of the underlying transaction were not decided and were expressly left open for reconsideration by the assessing officer.

Conclusion: The ex parte assessment order and the consequential demand notice were quashed and the matter was remanded for fresh decision after affording adequate opportunity of hearing.

Issue (ii): Whether the limitation relaxation in the statute applied to the fresh assessment directed in writ proceedings.

Analysis: The Court accepted the submission that the time-limit relaxation applicable to appellate or revisional orders would also govern a fresh decision passed pursuant to the writ remand. On that basis, it directed the assessing officer to complete the reassessment within a fixed period and held that no limitation objection would arise for the remanded exercise.

Conclusion: The limitation relaxation was held applicable to the reassessment directed in writ proceedings.

Final Conclusion: The assessment was set aside for want of proper notice and hearing, the matter was sent back for fresh adjudication, and the assessing officer was directed to complete the reassessment within the stipulated time while keeping the attachment intact until final determination.

Ratio Decidendi: An ex parte fiscal assessment made without effective notice and hearing is unsustainable and may be quashed with a remand for fresh assessment; where the court directs such reassessment, the statutory time-relaxation applicable to appellate or revisional orders may govern the fresh exercise.

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