Natural justice breach in assessment: non-service of show-cause notice and denial of hearing led to remand for fresh adjudication.

Assessment orders passed without service of the pre-assessment show-cause notice and without affording a personal hearing are vitiated for breach of natural justice. Where the assessee is denied notice and an opportunity to respond, the resulting assessment and consequential recovery action cannot stand. The Telangana High Court therefore set aside the assessment order and garnishee notice and remitted the matter to the assessing authority for fresh adjudication after issuing notice, granting time to reply, and providing a personal hearing.

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Issues: Whether the assessment order and consequential garnishee notice were liable to be set aside for non-service of the pre-assessment show-cause notice and denial of personal hearing.

Analysis: The assessment was made without service of the pre-assessment show-cause notice on the petitioner, and no personal hearing was afforded. This resulted in violation of the principles of natural justice and caused prejudice to the petitioner. The proper course was to set aside the assessment and consequential recovery action and remit the matter for fresh consideration after issuing notice, granting time to respond, and providing a personal hearing.

Conclusion: The assessment order and garnishee notice were set aside and the matter was remitted to the assessing authority for fresh adjudication in accordance with law.

Ratio Decidendi: An assessment made without service of the pre-assessment show-cause notice and without affording a personal hearing is vitiated for breach of natural justice and must be set aside with remand for fresh consideration.

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