1993 (1) TMI 8 - HC - Income Tax

Assessment Notice, Assessment Order, Income Tax, Natural Justice, Reassessment Notice, Writ Petition

Summary

Issues:
Challenging the legality, fairness, and natural justice principles of an assessment order (Exhibit P-6) due to lack of proper opportunity of being heard before completion.

Analysis:
The judgment delivered by the High Court of Kerala involved an appeal against an order of assessment (Exhibit P-6) passed by the Assistant Commissioner (Assessment), Agricultural Income-tax and Sales Tax, Thiruvananthapuram, and the State of Kerala for the year 1990-91. The appellant challenged Exhibit P-6 as illegal, unfair, and violative of natural justice principles. The learned single judge initially found that the objection filed by the appellant was considered in Exhibit P-6 and that the appellant had a remedy through an appeal. However, the appellant pursued a writ appeal against this decision (Original Petition No. 16388 of 1992).

During the hearing, it was revealed that the appellant was not given a proper opportunity to be heard before the assessment was completed. The pre-assessment notice (Exhibit P-3) was served on the appellant, and the appellant filed objections (Exhibit P-5) on July 14, 1992, which were received by the Assessing Officer on July 16, 1992. Despite the objections being detailed and complex, the assessment order (Exhibit P-6) was passed on the same day without an oral hearing. The court noted that the appellant was not heard before the assessment order was passed, which violated the principles of natural justice.

Citing previous judgments and legal provisions, the court emphasized that the opportunity to be heard must be real and effective, not merely a formality. The failure to provide a proper opportunity for oral hearing before passing the assessment order rendered the order void due to a breach of natural justice principles. The court quashed Exhibit P-6 and highlighted that the availability of an alternative remedy through an appeal does not preclude the court from intervening when there are violations of natural justice.

The court concluded that Exhibit P-6 was passed hastily and in violation of natural justice principles, indicating a lack of due care and caution. The order was deemed unreasonable, unfair, and mala fide. The learned single judge's decision to dismiss the original petition and rely on the statutory remedy was deemed incorrect. The court set aside the single judge's judgment, quashed Exhibit P-6, and allowed the writ appeal, emphasizing the need for a proper opportunity to the assessee in any redone assessment.