Natural justice in reassessment: denial of personal hearing after delay justified setting aside the assessment order.

A revised assessment order was interfered with because the taxpayer had specifically sought personal hearing, yet the assessment was finalised after a substantial lapse of time without affording an opportunity to explain the purchase bills produced in response to the requisition. The assessment was set aside on breach of natural justice, and the matter was sent back for fresh hearing and reassessment. The merits of the assessment were left open.

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Issues: Whether the revised assessment order was liable to be set aside for denial of personal hearing before finalisation of the assessment.

Analysis: The petitioner had sought personal hearing at an early stage, there was a substantial lapse of time between the revisional notice, the reply and the subsequent requisition for purchase bills, and the impugned order was passed after the bills had been produced without affording an opportunity to explain them. In these peculiar facts, the denial of hearing was treated as a sufficient ground to interfere, while leaving the merits of the assessment unanswered.

Conclusion: The impugned assessment order was set aside for denial of personal hearing, and the matter was directed to be heard afresh and re-assessed.

Ratio Decidendi: Where a taxpayer has specifically sought personal hearing and the assessment is completed after a significant lapse of time without giving that opportunity, the order is liable to be interfered with on the ground of breach of natural justice.

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