Reasoned tax assessments are mandatory: non-speaking orders passed without hearing or considering objections were set aside.

Assessment orders passed without considering detailed objections, without calling for supporting records, and without granting a requested personal hearing are vulnerable as non-speaking orders. In a tax assessment, the authority must act quasi-judicially, examine the material placed before it, and give reasons reflecting application of mind. Failure to do so breaches natural justice. On these facts, the orders were held unsustainable and were set aside.

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Issues: Whether the assessment orders were liable to be quashed for being non-speaking orders passed without considering the objections and without affording personal hearing.

Analysis: The petitioner had filed detailed objections and relied upon accounting treatment based on the percentage completion method under AS 7(2). The respondent, however, passed cryptic assessment orders without examining the objections, without calling for the books of account or further documents, and without granting the requested personal hearing. In a tax assessment, the authority is required to act quasi-judicially and pass a reasoned order after considering the material placed before it. The failure to do so amounted to breach of the principles of natural justice.

Conclusion: The assessment orders were non-speaking and unsustainable, and were rightly set aside.

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