Natural justice in Section 74 proceedings requires an effective hearing; defective notice led to quashing and remand.

An order under Section 74 was quashed because the hearing notice was not effectively brought to the taxpayer's notice and the hearing time was fixed before the reply period expired, denying a real opportunity to contest the case. The appellate order based on that defective adjudication was also set aside, as an appeal was not treated as a cure for the procedural breach at the original stage. The matter was remanded to the assessing authority for fresh adjudication after granting an effective opportunity of hearing.

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Issues: Whether the order passed under Section 74 without affording an effective opportunity of hearing, and the appellate order based on such proceedings, were liable to be quashed with a remand for fresh adjudication.

Analysis: The record showed that the hearing notice was not effectively brought to the petitioner's notice, and the time fixed for hearing was earlier than the time allowed for submission of reply. In these circumstances, the petitioner was denied a real opportunity to contest the proceedings. The availability of an appellate remedy was not treated as an adequate substitute for the procedural defect at the adjudication stage.

Conclusion: The impugned orders were quashed and the matter was remanded to the assessing authority to decide afresh after granting an opportunity of hearing. The petition was allowed.

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