Reasonable opportunity of hearing required in reassessment; hurried tax order and demand notice set aside for breach of natural justice.

A reassessment order passed after multiple revised proposition notices, without allowing adequate time to file a detailed reply, was held unsustainable for breach of natural justice. The Karnataka High Court noted that a quasi-judicial tax authority must give a reasonable opportunity of hearing before finalising tax liability, and that successive revised notices followed by a hurried order showed a perfunctory approach. The reassessment order and consequential demand notice were set aside, with liberty to the assessee to file objections to the last proposition notice and for the proceedings to be completed in accordance with law.

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Issues: Whether the reassessment order and consequential demand notice were liable to be set aside for want of reasonable opportunity of hearing.

Analysis: The reassessment was preceded by multiple revised proposition notices fixing different tax liabilities within a short span, and the assessee was not granted adequate time to file a detailed reply. An order passed by a quasi-judicial authority without affording a reasonable opportunity of being heard is contrary to the fundamental rule of natural justice. The issuance of successive revised notices and the hurried passing of the reassessment order reflected a perfunctory approach and did not permit the assessee to meet the proposal effectively.

Conclusion: The reassessment order and consequential demand notice were set aside in favour of the assessee, with liberty to file objections to the last proposition notice and for the proceedings to be concluded in accordance with law.

Final Conclusion: The writ petition succeeded on the ground of violation of natural justice, and the impugned tax proceedings were quashed with an opportunity reserved for fresh consideration after objections.

Ratio Decidendi: A reassessment order passed by a quasi-judicial tax authority without granting a reasonable opportunity of hearing is unsustainable and liable to be set aside as being contrary to natural justice.

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