Valid service of statutory notice at the last known address is essential; affixture fails without prior due diligence.

Service of the statutory notice under section 143(2) at the assessee's last known address is a condition precedent to a valid assessment. Substituted service by affixture is permissible only after due diligence in ordinary service has failed and only at the proper last known address. Here, the notice sent by speed post had not been shown to have failed before affixture was resorted to, and the address used for service was not the assessee's last known address from prior returns. On these facts, the notice was not validly served, the assessment proceedings were invalid, and the assessment and appellate order were set aside.

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Issues: Whether the assessment was vitiated for want of proper service of notice under section 143(2), including the validity of service by affixture and whether the notice was sent to the assessee's last known address.

Analysis: The notice sent by speed post had not been shown to have failed before the Assessing Officer resorted to affixture, and the record created doubt as to how an affixture order could be passed before the postal article was returned. The address used for service was also not the assessee's last known address as reflected from prior return filings. Service by affixture is permissible only when ordinary service has failed after due diligence and at the proper last known address, and those conditions were not met.

Conclusion: The notice was not validly served and the assessment proceedings were invalid.

Final Conclusion: The assessment and the appellate order were set aside because the statutory notice required to sustain the assessment was not properly served.

Ratio Decidendi: Service of the statutory notice at the assessee's last known address is a condition precedent to a valid assessment, and substituted service by affixture can be resorted to only after due diligence has failed in ordinary service.

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