Natural justice breach in assessment proceedings justified writ review despite alternative remedy and required fresh hearing.

An assessment made under Section 143(3) was set aside because the assessee was not given a real and effective opportunity to meet the material relied on, rendering the demand and penalty proceedings procedurally unfair and unsustainable. The Court also held that the existence of an alternative statutory remedy did not bar writ jurisdiction under Article 226 where there was a manifest breach of natural justice and the legality of the decision-making process was in issue. The writ petition was maintainable, and the matter was remitted for fresh assessment after a meaningful personal hearing.

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Issues: (i) Whether the assessment order under Section 143(3) of the Income-tax Act, 1961, together with consequential demand and penalty proceedings, was liable to be set aside for violation of principles of natural justice and denial of an effective opportunity of hearing; (ii) Whether the writ petition was maintainable under Article 226 of the Constitution of India despite the availability of an alternative statutory remedy.

Issue (i): Whether the assessment order under Section 143(3) of the Income-tax Act, 1961, together with consequential demand and penalty proceedings, was liable to be set aside for violation of principles of natural justice and denial of an effective opportunity of hearing.

Analysis: The assessment was held to have been completed in undue haste without granting a meaningful opportunity to deal with the material relied upon. Mere issuance of notices was found insufficient where the assessee was not afforded a real and effective chance of hearing. The defect went to the root of the decision-making process and rendered the assessment procedurally unfair and unsustainable.

Conclusion: The assessment order and the consequential demand and penalty proceedings were set aside as being vitiated by breach of natural justice.

Issue (ii): Whether the writ petition was maintainable under Article 226 of the Constitution of India despite the availability of an alternative statutory remedy.

Analysis: The availability of an appellate remedy was treated as a rule of discretion and self-restraint, not an absolute bar. Where there is a manifest violation of natural justice and the grievance strikes at the legality of the decision-making process, writ jurisdiction remains available notwithstanding the alternative remedy.

Conclusion: The writ petition was held to be maintainable.

Final Conclusion: The impugned assessment was invalidated for breach of natural justice, the challenge was entertained under writ jurisdiction, and the matter was sent back for a fresh assessment after granting a meaningful personal hearing.

Ratio Decidendi: An assessment order causing civil consequences cannot stand where the assessee is denied a real and effective opportunity of hearing, and the existence of an alternative statutory remedy does not bar writ jurisdiction in such cases.

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