Natural justice in tax assessment: order set aside for denial of hearing, cross-examination, and relied-on materials.

An assessment order was set aside for breach of natural justice because the assessee's objections specifically sought a personal hearing and permission to cross-examine the sellers, yet the authority did not meaningfully deal with those requests. The relied-on materials were not shown to have been furnished, and the governing circular required a hearing. The Court relied on its prior ruling that a hearing cannot be denied even where objections are not filed. The matter was remanded for fresh consideration after supply of the materials and grant of personal hearing.

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Issues: Whether the assessment order was liable to be set aside for violation of principles of natural justice, including denial of personal hearing and opportunity to seek cross-examination.

Analysis: The objections filed against the revision notice specifically sought personal hearing and permission to summon the sellers for cross-examination. The impugned order did not deal with those objections in a meaningful manner, and the relied-on materials were not shown to have been supplied to the petitioner. The governing departmental circular also required grant of personal hearing, and a prior decision of the Court had clarified that even if objections are not filed, the assessing authority cannot deny a hearing. In these circumstances, the assessment was found to be procedurally unfair.

Conclusion: The assessment order was rightly set aside as violative of principles of natural justice, and the matter was remanded for fresh consideration after furnishing the relied-on materials and granting personal hearing.

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