Affixation service and procedural notice defects did not nullify wealth-tax assessments; fresh assessment after hearing was

Valid service by affixation was upheld where the notice-server's reports and the Inspector's endorsement showed attempts at personal service followed by affixation in accordance with the prescribed procedure. Even if service under section 16(2) of the Wealth-tax Act were defective, the notice was treated as a procedural step that did not confer jurisdiction for assessment, so any defect would not make the assessment a nullity. The proper course was setting aside the assessments and directing fresh assessments after giving a reasonable opportunity of hearing, as proceedings validly initiated may continue from the stage at which the irregularity occurred.

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Issues: Whether the notice under section 16(2) of the Wealth-tax Act, 1957 was validly served by affixation, and if not, whether the assessments made under section 16(5) were void so as to require annulment instead of being set aside with a direction for fresh assessments.

Analysis: The notice-server's reports and the Inspector's endorsement showed attempts at personal service followed by affixation, and the Tribunal held that the service procedure was in accordance with section 41(1). Even assuming any defect in that service, the Tribunal held that a notice under section 16(2) is only a procedural notice and does not confer jurisdiction to make the assessment; therefore, a defect in its service does not render the assessment a nullity. The Tribunal further held that such an irregularity could be cured by setting aside the assessment and directing a fresh assessment after giving a reasonable opportunity of being heard, and relied on the principle that proceedings validly initiated may be continued from the stage where the illegality occurred.

Conclusion: The notice by affixation was valid, and in any event the AAC was right in setting aside the assessments and directing fresh assessments; the assessee's challenge failed.

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