Natural justice in tax assessment: failure to grant meaningful hearing and respond to adjournment request led to setting aside of orders.

Assessment orders under the Tamil Nadu General Sales Tax Act were held unsustainable where the dealer sought more time after receiving the hearing notice with only one working day available, and the assessing authority gave no response before finalising the assessment. The binding circular required fifteen days' reasonable opportunity and required any request for further time within that period to be considered and answered. Because the prescribed opportunity was not effectively granted, the assessment was found to violate natural justice. The assessment orders were set aside and the matter was remitted for fresh assessment after granting a personal hearing.

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Issues: Whether the assessment orders under Section 12 of the Tamil Nadu General Sales Tax Act, 1956 were liable to be set aside for violation of natural justice on the ground that the dealer was not granted a meaningful personal hearing in terms of the binding circular governing reasonable opportunity before assessment.

Analysis: The dealer had submitted preliminary objections and, upon receipt of the notice fixing hearing, promptly sought further time on the ground that only one working day was available between receipt of the notice and the hearing. The assessing authority did not respond to that request and proceeded to pass the assessment orders. The circular issued by the commercial taxes administration required fifteen days' reasonable opportunity and mandated that, if further time was sought within that period, the request had to be examined and a reply given. As no response was given and the hearing was not effectively granted, the prescribed procedure was not followed and the assessment suffered from violation of natural justice.

Conclusion: The assessment orders were set aside for violation of natural justice, and the matter was remitted for fresh assessment after granting personal hearing.

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