Assessment notice failure breaches natural justice, court orders re-assessment.

The High Court found that the assessing authority's failure to serve a revised notice proposing additional tax liability to the appellant amounted to a breach of natural justice. As a result, the Court set aside the previous orders and directed the matter to be restored for re-assessment by the Deputy Commissioner. The Court emphasized the importance of providing the appellant with an opportunity to respond before passing a final order. The appeal was allowed, with the Court ordering proper adherence to principles of natural justice in the re-assessment process.

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Issues:
1. Whether the impugned order of assessment breached principles of natural justice.

Analysis:
The appellant, a manufacturer and trader of granite slabs, filed a return under the Karnataka Value Added Tax Act, 2003. The assessing authority issued a notice for re-assessment for the period of 2009-2010, to which the appellant filed objections. Subsequently, the authority passed an order of assessment on 27.04.2016. The appellant challenged this order before the Single Judge, who declined to entertain the petition citing an alternative efficacious remedy. The main issue in the appeal was whether the impugned order breached principles of natural justice. The appellant contended that a revised notice dated 11.03.2016 proposing additional tax liability was not served to them, depriving them of the opportunity to respond. The respondent, after verification, was unable to confirm if such a revised notice was issued or served.

The High Court noted that the assessing authority considered the so-called revised notice in passing the order of assessment, despite the appellant not being given an opportunity to address it. The Court emphasized that when there is an ex facie breach of natural justice, self-imposed restrictions on entertaining petitions may not apply. In this case, the failure to serve the revised notice and provide an opportunity for the appellant to respond amounted to a breach of natural justice. Consequently, the Court set aside the orders of the Single Judge and the assessment, directing the matter to be restored for re-assessment by the Deputy Commissioner. The Court instructed that if the revised notice dated 11.03.2016 was to be considered, it must be served to the appellant for objections before a final order is passed.

In conclusion, the appeal was allowed, and the matter was remanded for re-assessment with proper adherence to principles of natural justice. The Court made no order as to costs, and the rule was made absolute. Additionally, a related application was deemed unnecessary for consideration in light of the main appeal judgment.

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