Natural justice breach in tax adjudication led to quashing of the demand and remand for fresh decision on merits.

An impugned tax order and demand notice were set aside for breach of natural justice because the assessee was not given a meaningful opportunity of hearing and no reasons were recorded before fastening financial liability. The HC held that denial of adequate hearing caused civil consequences and justified interference on that limited ground. The matter was remitted for fresh adjudication on merits in accordance with law, with liberty to both sides to place additional material before the authority.

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Issues: Whether the impugned tax order and demand notice were liable to be quashed for violation of the principles of natural justice, and whether the matter required fresh adjudication.

Analysis: The order fastened financial liability without affording adequate opportunity of hearing or recording reasons. The denial of a meaningful hearing amounted to breach of natural justice and caused civil consequences. The Court therefore interfered on that limited ground and directed reconsideration of the matter afresh, while permitting the parties to place additional material before the authority.

Conclusion: The impugned order was set aside for violation of natural justice and the matter was remitted for fresh decision on merits in accordance with law.

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