Natural justice in tax assessment: invalid e-mail notice and refusal to accept 'C' Forms led to remand.

Assessment proceedings were vitiated by breach of natural justice where notices were served by e-mail despite the applicable rule not contemplating such service, and tendered 'C' Forms were not taken on record. The court treated these lapses as prejudicial because the assessee was denied a proper opportunity to object and place material before the authority. The assessment order was set aside and the matter remitted for fresh consideration, with directions to issue a valid pre-assessment show-cause notice, allow time for objections, afford a personal hearing, and pass a reasoned order in accordance with law.

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Issues: Whether the assessment order was liable to be set aside for violation of natural justice on account of service of notices through e-mail and refusal to take 'C' Forms on record, and whether the matter required remand for fresh consideration.

Analysis: The petitioner challenged the assessment on the ground that notices were served by e-mail, though Rule 64(1)(b) of the Telangana VAT Rules, 2005 did not contemplate such service. The record also showed that 'C' Forms were tendered but not accepted. The respondents did not dispute that e-mail service was not contemplated under the applicable rule, nor that 'C' Forms could be submitted even after assessment finalisation. In these circumstances, the assessment suffered from breach of natural justice and caused prejudice.

Conclusion: The assessment order was set aside and the matter was remitted for fresh consideration with a direction to issue a proper pre-assessment show-cause notice, grant time for objections, afford personal hearing, and then pass a reasoned order in accordance with law.

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