Natural justice in assessment proceedings led to remand with fresh reply and hearing opportunity, subject to partial deposit.

Breach of natural justice was raised where the assessment order proceeded on the basis that no reply had been received, while the petitioner produced a reply said to have been filed before the order. The revenue relied on the acknowledgment to contend that the reply was received only after the order, but the petitioner was treated as entitled to contest the demand on merits. The assessment was set aside and the matter remanded for reconsideration with a fresh opportunity to reply and personal hearing, subject to deposit of 10% of the disputed tax demand.

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Issues: Whether the assessment order was liable to be set aside for breach of natural justice and the matter remanded for fresh consideration.

Analysis: The petitioner placed on record a reply said to have been submitted before the assessment order, while the revenue relied on the acknowledgment to indicate that the reply was received after the order was issued. The order itself recorded that no reply had been received and proceeded on that basis. In these circumstances, the petitioner was found entitled to an to contest the demand on merits, but on terms requiring deposit of a portion of the disputed demand.

Conclusion: The impugned assessment order was set aside and the matter was remanded for reconsideration, subject to deposit of 10% of the disputed tax demand and a fresh opportunity of reply and personal hearing.

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