Natural justice in assessment proceedings: conditional remand granted for fresh hearing after setting aside best judgment order.

An assessment made on a best judgment basis was set aside because the taxpayer had not been given a meaningful opportunity to contest the proposal on merits. The court directed reconsideration in the interest of justice, but made fresh hearing conditional on payment of 10% of the disputed tax demand. The authority was required to accept a reply, afford a reasonable opportunity including personal hearing, and then pass a fresh order.

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Issues: Whether the assessment order was liable to be set aside for want of a reasonable opportunity and the matter remanded for fresh consideration.

Analysis: The tax demand had been made on a best judgment basis after non-response to notice and non-appearance at the personal hearing. The petitioner asserted lack of knowledge of the proceedings and absence of a meaningful opportunity to contest the proposal on merits. In these circumstances, the interest of justice warranted reconsideration, but on terms requiring a deposit of 10% of the disputed tax demand before the petitioner could be heard afresh.

Conclusion: The impugned order was set aside conditionally, the petitioner was permitted to file a reply after remitting 10% of the disputed tax demand, and the authority was directed to grant a reasonable opportunity, including personal hearing, and pass a fresh order thereafter.

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