Natural justice in tax assessment requires a real hearing; inadequate reply time led to quashing and remand.

Assessment, demand and penalty proceedings were held unsustainable where the taxpayer was given only three days to reply, including a weekend, and the record did not show any effective hearing. The Court found that this did not satisfy audi alteram partem, because a reasonable and meaningful opportunity to respond is an essential component of natural justice. On that basis, the impugned assessment order, demand notice and penalty notice were quashed, and the matter was remanded for de novo consideration after granting a proper opportunity of hearing.

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Issues: Whether the assessment order, demand notice, and penalty notice were liable to be quashed for breach of natural justice on account of inadequate time being granted to reply and absence of effective opportunity of hearing.

Analysis: The petitioner received only three days to respond to the show-cause notice, two of which were Saturday and Sunday, leaving no real opportunity to file a meaningful reply. The record did not show that the petitioner was afforded a proper hearing before the assessment was completed. In such circumstances, the requirement of audi alteram partem, which is an essential component of fair hearing, was not satisfied. The assessment, demand, and penalty consequentially could not be sustained.

Conclusion: The impugned assessment order, demand notice, and penalty notice were quashed and the matter was remanded for fresh de novo consideration after granting the petitioner an opportunity of hearing.

Ratio Decidendi: An assessment completed without giving a reasonable and effective opportunity to respond and be heard is vitiated by breach of natural justice and is liable to be set aside with remand for fresh decision.

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