Natural justice in assessment: order quashed and matter remanded after denial of effective hearing

An assessment order passed without an effective personal hearing was held unsustainable for breach of natural justice. Because the demand had already been appropriated from the bank account and revenue interest was secured, the proper course was not final disposal on merits but remand. The order was quashed, and fresh assessment was directed after giving the assessee an opportunity to reply to the show cause notice and to be heard personally. The appropriated amount was left to abide by the result of the remand proceedings.

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Issues: Whether the assessment order was liable to be quashed for breach of principles of natural justice, and what consequential relief should follow.

Analysis: The materials on record showed that no effective personal hearing had been afforded before the impugned order was passed. As the demand had already been appropriated from the petitioner's bank account, revenue interest stood secured. In these circumstances, the order could not be sustained and the matter required reconsideration after affording the petitioner an opportunity to respond to the show cause notice and to be heard.

Conclusion: The impugned order was quashed and the matter was remanded for fresh assessment after granting the petitioner a reply opportunity and personal hearing.

Final Conclusion: The petitioner obtained setting aside of the order and a fresh adjudication on remand, while the appropriated amount was left to abide by the result of the remand proceedings.

Ratio Decidendi: An assessment order passed without affording an effective opportunity of hearing is liable to be set aside, and where revenue is already secured, the proper course is remand for fresh decision after compliance with natural justice.

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