Reasonable opportunity in tax assessment: late service of proposition notice vitiates assessment and preserves writ jurisdiction.

An assessment under the Karnataka Agricultural Income-tax Act was held vulnerable where the proposition notice reached the assessee only on the date fixed for objections, so no effective opportunity to object or be heard was afforded. The statutory requirement was a reasonable opportunity, and the authority was expected to issue a fresh notice if the original notice had not enabled participation; completing the assessment in those circumstances breached the hearing requirement and vitiated the assessment. The existence of an alternative remedy did not bar writ relief because the defect went to jurisdiction, and the impugned assessment, penalty and demand notices were quashed, leaving the authority free to proceed again from the proposition notice stage.

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Issues: (i) Whether the assessment under the Karnataka Agricultural Income-tax Act, 1957, could stand when the proposition notice was served too late to afford a reasonable opportunity of objection and hearing. (ii) Whether the existence of an alternative remedy barred exercise of writ jurisdiction under Article 226 of the Constitution of India.

Issue (i): Whether the assessment under the Karnataka Agricultural Income-tax Act, 1957, could stand when the proposition notice was served too late to afford a reasonable opportunity of objection and hearing.

Analysis: The assessment was made under Section 19(4) after a proposition notice had been issued, but the notice reached the petitioners only on the very date by which objections were to be filed. The statutory requirement under the second proviso to Section 19 is a reasonable opportunity, not a mere formal issuance of notice. Where the authority knew, or ought to have known from the return of acknowledgement, that the notice had not effectively enabled appearance and objection, fairness required a fresh notice fixing another date. Proceeding to complete the assessment without such opportunity amounted to a denial of the hearing contemplated by the Act.

Conclusion: The assessment was invalid for want of reasonable opportunity and was liable to be set aside.

Issue (ii): Whether the existence of an alternative remedy barred exercise of writ jurisdiction under Article 226 of the Constitution of India.

Analysis: The objection based on alternative remedy was rejected because the defect went to the root of jurisdiction. When the assessment itself is completed in breach of the mandatory opportunity requirement, the authority acts without jurisdiction for that purpose. In such a situation, the availability of a statutory remedy does not prevent interference in writ jurisdiction.

Conclusion: The writ petition was maintainable notwithstanding the alternative remedy.

Final Conclusion: The impugned assessment and consequential penalty and demand notices were quashed, while the assessing authority was left free to continue the proceedings from the stage of the proposition notice.

Ratio Decidendi: Where a taxing authority proceeds to complete a best judgment assessment without giving an effective and reasonable opportunity to object after service of the proposition notice, the resulting assessment is vitiated for breach of the statutory hearing requirement and jurisdictional fairness.

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