Natural justice in tax assessment: omission of proposed additions in notice and denial of hearing led to quashing and remand.

An assessment order was held unsustainable where the proposed addition was not specifically set out in the show-cause notice and the assessee was denied personal hearing. The Madras HC treated this as a breach of natural justice and want of proper opportunity, and held that the availability of an alternative statutory appeal did not bar writ relief when the appeal period had already expired. The assessment was quashed and the matter remitted for fresh consideration after hearing the assessee.

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Issues: Whether the assessment order could be sustained when the proposed addition was not indicated in the show-cause notice and the assessee was denied personal hearing.

Analysis: The assessment was founded on an addition that had not been specifically proposed in the notice issued to the assessee. The assessee also complained of non-grant of personal hearing before the order was passed. In these circumstances, the assessment was found to be vitiated for want of proper opportunity and for breach of natural justice. The availability of an alternative statutory appeal did not prevent interference, especially when the limitation for appeal had already expired and the matter required reconsideration on a proper hearing.

Conclusion: The writ petition was allowed, the assessment order was quashed, and the matter was remitted to the respondent for fresh consideration after giving the assessee an opportunity of hearing.

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