Natural justice in assessment proceedings requires consideration of the taxpayer's reply and an effective hearing before any final order.

An assessment order passed on the same day as the assessee's detailed reply was filed, without considering the reply or granting an effective hearing, was found procedurally unfair. The Court held that the authorities must examine the explanation already on record and follow the principles of natural justice before concluding the assessment. The order was quashed and the matter was remitted for fresh consideration, with directions to consider the reply, afford a hearing, and pass a reasoned speaking order in accordance with law.

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Issues: Whether the assessment order passed on the same day as the petitioner's detailed reply was filed, without considering that reply and without affording an effective hearing, was sustainable in law.

Analysis: The assessment was completed on the very day the detailed reply with supporting documents was uploaded. The impugned order proceeded without considering the reply already on record, despite the controversy being one that required fair consideration of the assessee's explanation. In these circumstances, the Court found a prima facie case of procedural unfairness and held that interference was warranted to secure compliance with the principles of natural justice. The matter was therefore remitted with a direction to consider the reply, grant an opportunity of hearing, and pass a reasoned speaking order in accordance with law.

Conclusion: The assessment order was quashed and set aside, and the matter was directed to be reconsidered afresh after hearing the petitioner.

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