Natural justice in tax assessment requires actual prejudice; later entitlement certificates justified remand for reconsideration.

A tax assessment was not invalidated merely because no further best-judgment notice was issued where the assessee already knew of the proceedings and could not show actual prejudice from the omission. The natural justice objection therefore failed on the facts. At the same time, the matter was remitted for reconsideration of the assessee's pending representation based on later-received exemption and entitlement certificates, as those documents could have affected the assessment if considered earlier. The remand was limited to fresh statutory consideration of that entitlement-based claim and related liability, without disturbing the conclusion that the notice lapse alone did not vitiate the assessment.

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Issues: (i) Whether the assessment and demand orders were vitiated for want of notice under the best judgment assessment provision and for breach of natural justice. (ii) Whether the matter warranted remand for reconsideration of the assessee's entitlement-related representation.

Issue (i): Whether the assessment and demand orders were vitiated for want of notice under the best judgment assessment provision and for breach of natural justice.

Analysis: The assessment proceedings had already been initiated by notice under the audit assessment provision, and the assessee had knowledge of the proceedings. The assessee did not dispute that the exemption and entitlement certificates were received only after the impugned assessment orders. In such circumstances, the absence of a further notice under the best judgment provision did not, by itself, invalidate the assessment. The governing rule applied was that breach of natural justice does not automatically vitiate an order unless prejudice is shown. As the assessee could not demonstrate actual prejudice flowing from the omission of the further notice, and no other substantive challenge to the assessment survived, interference on that ground was not justified.

Conclusion: The challenge to the assessment orders on the sole ground of breach of natural justice failed.

Issue (ii): Whether the matter warranted remand for reconsideration of the assessee's entitlement-related representation.

Analysis: The assessee had subsequently sought reassessment after receiving the exemption and entitlement certificates, and that representation remained pending. The Court noted the statutory power of rectification and considered that the certificates, if produced during the proceedings, could have materially affected the assessment. In the interests of justice, and without disturbing the legal position on the natural justice challenge, the Court found it appropriate to remit the matter to the departmental authority for due consideration of the pending representation in accordance with the governing statute and policy framework.

Conclusion: The matter was remitted to the departmental authority for fresh consideration of the pending representation.

Final Conclusion: The assessments were not set aside on the natural justice challenge, but the assessee obtained a remand for reconsideration of its entitlement-based claim and related tax liability.

Ratio Decidendi: A procedural lapse in notice does not vitiate a tax assessment unless the affected party demonstrates actual prejudice, and where entitlement documents later emerge and remain unconsidered, remand for statutory reconsideration may be appropriate.

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