Natural justice breach in assessment proceedings justified writ relief despite alternative appeal, with the demand notice quashed and matter remitted.

A writ challenge to an assessment and demand notice succeeded where the assessing authority failed to meaningfully consider the taxpayer's material, accounting method, tax audit details and explanation for expenditure, and also omitted any response to the Supreme Court authority relied upon. The penalty notice was also issued in a cyclostyle form without specifying the alleged infraction, leaving the order bereft of reasons and in breach of fair hearing requirements. The court held that such a gross violation of natural justice justified writ jurisdiction despite the availability of an alternative statutory appeal, and it quashed the assessment order and demand notice while remitting the matter for fresh consideration after hearing the taxpayer.

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Issues: Whether the assessment order and demand notice were liable to be quashed for breach of the principles of natural justice and whether the existence of an alternative statutory appeal barred writ jurisdiction under Article 226.

Analysis: The writ applicant challenged the assessment on the ground that the assessing authority did not meaningfully consider the material, the consistently followed method of accounting, the tax audit details, and the explanation regarding allowable expenditure. The order also did not deal with the relevant Supreme Court decision relied upon by the applicant, and the penalty notice was found to be in a cyclostyle form without indicating the nature of the infraction. In these circumstances, the impugned order was held to be bereft of reasons and passed in violation of fair hearing requirements. The objection based on alternative remedy was rejected because a gross violation of natural justice permits invocation of writ jurisdiction.

Conclusion: The assessment order and demand notice were quashed and the matter was remitted for fresh consideration after hearing the writ applicant and taking into account the relevant material.

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