Natural justice in escaped turnover assessment requires a further hearing after adjournment request before completing assessment orders.

Assessment orders under section 25(1) of the Kerala Value Added Tax Act were held unsustainable where the assessee had sought time after notices proposing escaped turnover assessment, but the assessing authority issued no response to the adjournment request and completed the assessments without a further notice or hearing. The court treated this as non-compliance with the principles of natural justice and found that the assessments could not be made straightaway on the basis of the earlier notices. Fresh assessments were directed to be completed only after giving the assessee an opportunity of hearing.

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Issues: Whether assessment orders passed under section 25(1) of the Kerala Value Added Tax Act, without giving the assessee a further notice after an adjournment request and without affording a hearing, were sustainable.

Analysis: The assessee had sought time after receipt of the notices proposing escaped turnover assessment. No communication was issued on the adjournment request. In the absence of any response, the assessing authority was not justified in completing the assessments straightaway on the basis of the notices without issuing a further notice or granting an opportunity of hearing. Such a course amounted to non-compliance with the principles of natural justice.

Conclusion: The assessment orders were unsustainable and were set aside. Fresh assessments were directed to be completed after affording the assessee an opportunity of hearing.

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