Breach of natural justice in reassessment: failure to consider C Forms and objections led to quashing and remand.

Reassessment and rectification proceedings under the sales tax and VAT laws were vitiated where the authority proceeded on the footing that no written reply had been filed, despite the assessee seeking time, appearing through an authorised representative, and placing or claiming to place C Forms and supporting acknowledgements before the department. The order and the rectification rejection also failed to consider the material relied on in defence. Such non-consideration of relevant documents and absence of meaningful hearing amounted to breach of natural justice. The Karnataka HC quashed both the reassessment order and the rectification endorsement and remitted the matter for fresh disposal after considering the objections and materials.

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Issues: Whether the reassessment order and the endorsement rejecting rectification were liable to be quashed for breach of natural justice and non-consideration of the 'C' Forms, and whether the matter required remand for fresh adjudication.

Analysis: The reassessment was initiated under the sales tax and value added tax provisions after issuance of proposition notices. The petitioner had sought time to file objections, had appeared through an authorised representative, and had also produced or claimed to have produced 'C' Forms before the local VAT office before and after the reassessment. The impugned order proceeded on the footing that no written reply had been filed and did not advert to the material regarding the 'C' Forms. The subsequent rectification request, which again placed the supporting acknowledgements and documents before the authority, was rejected without a considered examination of the grounds raised. The availability of an alternate remedy did not bar interference where the complaint was one of violation of natural justice.

Conclusion: The reassessment order and the rectification endorsement were quashed, and the reassessment proceedings were remitted to the authority for fresh disposal in accordance with law after considering the objections and materials to be filed by the petitioner.

Ratio Decidendi: An assessment or reassessment order passed without meaningful opportunity of hearing and without considering material filed in support of the assessee's defence is vitiated by breach of natural justice and is liable to be set aside, even if an alternate remedy is otherwise available.

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