Natural justice defect: hearing fixed before reply deadline made the section 73 assessment order unsustainable

A personal hearing fixed before the expiry of the time allowed for filing a reply to the show cause notice was held to be illusory and contrary to the prescribed procedure, amounting to breach of natural justice. Because the assessee was not given a meaningful opportunity to respond before hearing, the assessment order under section 73 could not be sustained. The court quashed the order and remitted the matter to the adjudicating officer to restart from the show cause stage and fix a proper date for personal hearing.

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Issues: Whether the assessment order passed under section 73 could be sustained when the date of personal hearing was fixed before the last date for filing reply to the show cause notice, thereby rendering the hearing illusory and contrary to the prescribed procedure.

Analysis: The writ petition challenged the assessment order on the ground of breach of natural justice. The factual position noticed was that the date of personal hearing was fixed 18 days before the last date granted for filing the reply. The Revenue fairly conceded that, in such circumstances, the hearing offered was illusory and not in conformity with the prescribed procedure. On that basis, the procedural defect was treated as fatal to the assessment order.

Conclusion: The assessment order was quashed and the matter was remitted to the adjudicating officer to proceed afresh from the stage of the show cause notice after fixing a proper date for personal hearing.

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