Natural justice in tax reassessment requires notice, reply and hearing before adverse assessment can stand

Assessment orders passed after reopening were vulnerable because the assessee's objections were not considered, no effective response to the show-cause notices was recorded, and the orders did not show that a personal hearing was granted. The challenge also included a limitation objection that reopening was beyond six years from the deemed assessment, which had likewise not been addressed. The orders were therefore quashed and the matter remanded for fresh consideration on merits, with directions to furnish the notices, receive a detailed reply, grant personal hearing, and decide the limitation issue in accordance with law.

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Issues: Whether the assessment orders were liable to be quashed for violation of principles of natural justice and whether the matter was required to be remanded for fresh consideration, including the limitation objection.

Analysis: The assessment orders were passed after reopening under section 27 of the Tamil Nadu Value Added Tax Act, 2006. The record showed that the petitioner did not file a reply to the show-cause notices, while also asserting non-receipt of those notices. The assessment orders did not reflect that a personal hearing had been granted. The objections raised by the petitioner, including the plea that reopening was beyond the six-year period from the deemed assessment under section 22(2), had not been considered in the impugned orders. In these circumstances, the absence of notice response consideration and personal hearing amounted to a breach of natural justice.

Conclusion: The impugned assessment orders were quashed and the matters were remanded to the assessing authority for fresh consideration on merits, after furnishing the show-cause notices, receiving a detailed reply, and granting personal hearing, with the limitation issue also to be decided in accordance with law.

Final Conclusion: The proceedings were not finally concluded on the merits of the tax demand, and the assessing authority was directed to redo the exercise in accordance with law after observing natural justice.

Ratio Decidendi: An assessment order passed without effective opportunity of reply and personal hearing, and without considering the assessee's objections, is vulnerable to quashing and remand for fresh adjudication.

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