Natural justice in assessment proceedings requires notice to the correct address when a firm has discontinued business.

Assessment proceedings were vitiated where notice was issued only to the business address of a firm that had already informed the department that it had discontinued business. In those circumstances, fresh notice should have been sent to the personal addresses of the petitioner and partners, which were available with the department, because mere service at the closed business address did not satisfy the requirement of fair notice. The Kerala HC held that the petitioner was denied a proper opportunity before the assessment order was passed, so the order was liable to be quashed for breach of natural justice.

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Issues: Whether the assessment order was vitiated for noncompliance with the principles of natural justice on account of notice having been issued only at the business address of the discontinued firm.

Analysis: The firm had informed the department that business had stopped with effect from 31.07.2011. In that background, if fresh proceedings were proposed, notice ought to have been issued to the personal addresses of the petitioner and the partners, which were available with the department. Mere issuance of notice at the business address, even if an earlier notice had been received there, did not justify dispensing with proper notice for the later proceedings. The circumstances showed that the petitioner was denied a fair opportunity before the assessment order was passed.

Conclusion: The assessment order was vitiated for breach of natural justice and was liable to be quashed.

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