Natural justice in assessment proceedings: order set aside where sales suppression was raised without proper notice or hearing.

The request to transfer the assessment from the existing officer was rejected because the allegation against that officer had been withdrawn by affidavit, leaving no surviving basis for transfer. The assessment order, however, was set aside in relation to alleged sales suppression because the assessee had not been given proper notice or a meaningful opportunity to meet that ground. The Court held that proceeding on a basis not covered by the objection process breached natural justice, and remitted the matter for fresh consideration with show cause notice, time for objections, and personal hearing.

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Issues: (i) Whether the prayer to transfer the assessment from the existing officer was liable to be granted. (ii) Whether the assessment order dated 18.07.2016, insofar as it related to alleged sales suppression, was vitiated for want of notice and opportunity.

Issue (i): Whether the prayer to transfer the assessment from the existing officer was liable to be granted.

Analysis: The allegation against the officer was withdrawn by affidavit and placed on record. In view of that withdrawal, the basis for seeking transfer of the case no longer survived.

Conclusion: The prayer for transfer was rejected.

Issue (ii): Whether the assessment order dated 18.07.2016, insofar as it related to alleged sales suppression, was vitiated for want of notice and opportunity.

Analysis: The assessment order proceeded on a ground of sales suppression for which the petitioner had not been given a proper opportunity to meet the case. The record showed that the objection process did not cover that specific basis of assessment, and the order was therefore passed without due opportunity to the petitioner. The Court held that this amounted to a violation of the principles of natural justice.

Conclusion: The assessment order dated 18.07.2016 was set aside and the matter was directed to be re-done after issuing show cause notice, granting time for objections, and affording personal hearing.

Final Conclusion: The writ petition failed on the transfer request, but succeeded to the extent that the impugned assessment was interfered with and remitted for fresh consideration in accordance with law.

Ratio Decidendi: An assessment based on a ground for which the assessee was not given notice and a meaningful opportunity of hearing is liable to be set aside for breach of natural justice, even if ancillary reliefs in the same petition are rejected.

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