Natural justice in assessment proceedings requires a fair hearing before civil consequences follow, despite the availability of appeal

Breach of natural justice warranted interference with the assessment where the assessee had sought a hearing and raised objections to the proposed additions and penalty, but the order was completed without a fair opportunity. The Court relied on a departmental circular stressing observance of natural justice and earlier precedent that assessment orders with civil consequences should not be passed without personal hearing. The existence of an appellate remedy did not cure the foundational defect of denial of hearing. The assessment order was set aside and the matter remitted to the Assessing Officer for fresh consideration after giving the assessee an opportunity.

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Issues: Whether the assessment order was liable to be interfered with for breach of natural justice and whether the matter should be remitted for fresh consideration.

Analysis: The dispute turned on whether the assessee had been afforded a fair opportunity before the assessment was completed. The record showed that the assessee had sought hearing and had raised objections to the proposed additions and penalty. The Court noted the departmental circular emphasizing observance of natural justice and relied on earlier precedent holding that assessment orders affecting civil consequences should not be passed without giving the assessee an opportunity of personal hearing. In these circumstances, the availability of an appellate remedy did not prevent interference where the foundational requirement of fair hearing was not satisfied.

Conclusion: The assessment order was set aside and the matter was remitted to the Assessing Officer for fresh consideration after affording the assessee an opportunity.

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