Natural justice requires a fair hearing before ex parte tax assessment; remand granted for fresh adjudication.

An ex parte tax assessment may be set aside where the assessee was denied a meaningful opportunity to reply to the show cause notice and to be heard. Accepting the explanation for non-appearance, the HC held that the assessment should be reconsidered after granting an opportunity to file a reply and after observing natural justice. The assessment order was therefore set aside and the matter remanded for fresh adjudication in accordance with law.

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Issues: Whether the ex parte assessment order passed under Section 73 could be set aside and the matter remanded for a fresh assessment after granting the taxpayer an opportunity to reply to the show cause notice and be heard.

Analysis: The assessment order was passed without the taxpayer filing a reply to the show cause notice and without appearance before the assessing authority. The Court accepted the explanation regarding illness and held that a further opportunity should be granted so that the reply to the show cause notice could be filed and the matter reconsidered by the assessing authority in accordance with law.

Conclusion: The ex parte assessment order was set aside and the matter was remanded for fresh adjudication after affording an opportunity to reply and be heard.

Final Conclusion: The challenge succeeded to the extent of securing a fresh consideration of the assessment on merits after compliance with the procedural safeguard of hearing.

Ratio Decidendi: An adverse tax assessment passed ex parte may be set aside where the assessee was denied a meaningful opportunity to respond, and the matter can be remitted for fresh decision after observance of natural justice.

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