Natural justice and proper enquiry in tax assessment led to quashing of the order and remand for fresh consideration.

An assessment based on alleged suppression of purchases and excess input tax credit was held to be vulnerable where the taxpayer was not given a personal hearing and the authority did not conduct an independent enquiry or cross-verify the transactions with the other end dealer. The order was found to suffer from breach of natural justice and non-application of mind. The assessment was quashed, and the matter was remanded to the assessing authority for fresh consideration after giving adequate opportunity to file objections and be heard in person.

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Issues: Whether the assessment order was liable to be quashed for violation of the principles of natural justice and non-application of mind, and whether the matter should be remanded for fresh consideration.

Analysis: The assessment was based on alleged suppression of purchases and excess input tax credit. The petitioner was not afforded a personal hearing, and the order was passed without conducting an independent enquiry or cross-verifying the transactions with the other end dealer. In these circumstances, the assessment proceedings were found to be vitiated by breach of natural justice and lack of proper application of mind.

Conclusion: The assessment order was quashed and the matter was remanded to the assessing authority for fresh consideration after granting adequate opportunity, including filing of objections and personal hearing.

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