Revisional power and natural justice: assessee revision was unavailable, but assessment failed for lack of effective notice.

Section 35 of the Karnataka Agricultural Income-tax Act, 1957 confers revisional power on the Commissioner only to examine subordinate orders prejudicial to the Revenue; it does not create a general assessee-initiated revision. The assessee's revision was therefore not maintainable, and refusal to entertain it was justified. A best judgment assessment made before effective service of the proposition notice and hearing date deprived the assessee of an opportunity to object or present the case, breaching statutory procedure and natural justice. The assessment order was accordingly illegal and was quashed, with fresh proceedings directed after giving the assessee an opportunity to respond.

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Issues: (i) whether a revision by the assessee under section 35 of the Karnataka Agricultural Income-tax Act, 1957 was maintainable before the Commissioner; (ii) whether the best judgment assessment was valid when the proposition notice was not served before the hearing date.

Issue (i): whether a revision by the assessee under section 35 of the Karnataka Agricultural Income-tax Act, 1957 was maintainable before the Commissioner

Analysis: Section 35 confers revisional power on the Commissioner only when he calls for and examines the record of a subordinate authority and finds the order to be erroneous in so far as it is prejudicial to the interests of the Revenue. The provision does not create a general right of revision at the instance of an assessee. The power is limited in scope and cannot be enlarged by interpretation.

Conclusion: The revision filed by the assessee was not maintainable, and the Commissioner was justified in refusing to entertain it on merits.

Issue (ii): whether the best judgment assessment was valid when the proposition notice was not served before the hearing date

Analysis: The proposition notice fixing the hearing date was served only after the date fixed for hearing. In those circumstances, the assessee had no effective opportunity to file objections or present the case before assessment. The assessment was thus made in breach of the statutory procedure and the requirements of natural justice.

Conclusion: The assessment order was illegal and was quashed, with directions for fresh proceedings after giving the assessee an opportunity to object.

Final Conclusion: The challenge failed on the question of revisional maintainability, but succeeded on the validity of the assessment, resulting in quashing of the assessment order and remand for fresh consideration in accordance with law.

Ratio Decidendi: A revisional power confined to orders prejudicial to revenue does not confer a general assessee-initiated remedy, and an assessment made before effective service of notice and opportunity to object is invalid for breach of statutory procedure and natural justice.

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