Natural justice in assessment demands effective personal hearing and reasoned consideration of objections before finalisation.

A statutory assessment order must reflect independent consideration of the dealer's objections and be supported by reasons; here, the Assessing Officer substantially reproduced the pre-revision notice and did not reconcile the figures or address the replies filed. When the authority accepts that the objections have some merit, fairness requires that the assessee be afforded an effective personal hearing and an to produce records before finalising the assessment. The Madras HC held that the assessment was passed in breach of natural justice and was liable to be set aside.

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Issues: Whether the assessment order was liable to be set aside for violation of the principles of natural justice on account of failure to afford effective opportunity of personal hearing and proper consideration of the dealer's objections.

Analysis: The assessment was made after issuance of pre-revision notice and successive replies by the dealer, including a request to be heard in person and to produce records. The order passed by the Assessing Officer substantially reproduced the earlier notice and did not reflect an independent application of mind to the objections or reconciliation of the figures furnished by the dealer. Where the authority accepts that the objections have some merit, fairness requires that the assessee be called upon to appear with records and explain the transactions before finalising the assessment. A statutory assessment order must be reasoned and based on consideration of the material placed before the authority.

Conclusion: The assessment order was passed in violation of the principles of natural justice and was liable to be set aside.

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