Natural justice requires an effective hearing before demand orders; ex parte assessment set aside and remanded for reconsideration.

An ex parte demand order was quashed because the assessee was not given an effective opportunity of personal hearing. The notice was defective as the hearing date preceded the deadline for filing the reply, and although a reply was said to have been submitted, no further hearing was granted before the order was passed. On these facts, the court found the order to have been made without real hearing and without proper application of mind. The matter was remitted for a fresh reply, fresh notice of hearing, and a fresh order in accordance with law.

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Issues: Whether the ex parte demand order was liable to be quashed for want of effective opportunity of hearing and whether the matter required fresh consideration after a new reply and personal hearing.

Analysis: The notice and subsequent proceedings were found to be defective because the date fixed for personal hearing preceded the date up to which the reply could be filed. The reply was stated to have been submitted, but no further hearing was granted before the impugned order was passed. On these facts, the order was held to have been made without affording a real opportunity of hearing and without proper application of mind.

Conclusion: The demand order was quashed and the matter was sent back for a fresh reply, fresh notice of hearing, and a fresh order in accordance with law.

Final Conclusion: The petitioner obtained relief against the impugned order, but the dispute was restored for reconsideration after compliance with the hearing requirement.

Ratio Decidendi: An adjudicatory order passed without giving an effective opportunity of personal hearing, especially where the hearing date precedes the reply deadline, is liable to be set aside on principles of natural justice.

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