Natural justice in tax assessment: failure to grant personal hearing led to quashing and remand for fresh consideration.

An assessment order and demand notice were quashed because the assessee was not given the personal hearing and effective opportunity required before finalising the assessment. The Court held that where the governing procedure and departmental circular mandate such opportunity, failure to comply with it amounts to a breach of natural justice. The matter was remanded to the assessing authority for fresh consideration after granting sufficient opportunity, including personal hearing.

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Issues: Whether the assessment order and demand notice were liable to be quashed for violation of natural justice, particularly for failure to afford personal hearing before finalising the assessment.

Analysis: The assessment was made after issuance of a pre-assessment notice under Section 22(4) of the Tamil Nadu Value Added Tax Act, 2006, but the Court found that the assessee was not afforded sufficient opportunity in the manner required by the departmental circular and the governing procedure. The Court relied on the principle that personal hearing is mandatory where the procedure so requires, and that non-compliance with the prescribed opportunity before passing a speaking assessment order amounts to violation of natural justice.

Conclusion: The assessment order and demand notice were quashed. The matter was remanded to the assessing authority for fresh consideration after granting the assessee sufficient opportunity, including personal hearing.

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