Natural justice in assessment proceedings requires proper service and hearing before disallowing input tax credit and imposing liability.

An ex parte assessment disallowing input tax credit and imposing tax, penalty and interest was set aside because proper service of notice and a fair opportunity of hearing were not established. The assessee disputed service, denied that the person treated as its accountant had authority to represent it, and stated that invoices and supporting records were available for production. As the dispute required factual verification and documentary examination, the assessment could not stand without allowing the assessee to present its case. The matter was remanded for fresh assessment after granting an opportunity of hearing in accordance with law.

---

---

Issues: Whether the ex parte assessment order disallowing input tax credit and creating tax, penalty and interest liability was liable to be set aside for want of proper service and denial of opportunity of hearing, with the matter remitted for fresh assessment.

Analysis: The assessment had been completed ex parte. The petitioner disputed service of notice and denied that the person shown as its accountant had any authority to represent it. It was also asserted that original tax invoices and supporting records were available for production. In these circumstances, the Court found that a fair opportunity was required before the assessing authority could finally determine liability. Since the controversy involved factual verification and documentary examination, the assessment could not be sustained without affording the assessee an effective chance to present its case.

Conclusion: The ex parte assessment order was set aside and the matter was remanded to the assessing authority for fresh decision after granting an opportunity of hearing to the assessee in accordance with law.

---