When an assessment order is cancelled for violation of principles of natural justice, fresh proceedings are left open, and no further direction from the Appellate Tribunal is necessary.

K. S. PARIPOORNAN, J. - The Revenue is the revision-petitioner in this tax revision case. The respondent is an assessee to sales tax. We are concerned with the assessment year 1963-64. An array of facts are stated in the memorandum of revision, and also in the orders passed by the statutory authorities. The Appellate Tribunal has referred to innumerable facts in its appellate order dated 23rd March, 1983. It is not necessary to advert to all of those details, at this stage. The question that is posed before us is very simple. In the ultimate analysis, we are of the view that there was no necessity to file this revision at all. Shortly stated, the Appellate Tribunal cancelled the assessment order. It was so done, since the Tribunal took the view that the principles of natural justice were violated in passing the order of assessment. The Revenue contends that the Appellate Tribunal should have remanded the case for fresh disposal and directed the assessing authority to pass a fresh assessment order after affording reasonable opportunity to the assessee. In so far as it has not been done, the order of the Appellate Tribunal is erroneous in law which deserves to be set aside. That is the plea in this revision.

2. We heard counsel for the Revenue, Mr. N. N. Divakaran Pillai, as also counsel for the respondent-assessee, Mr. K. C. Balagangadharan. It is axiomatic that when an order of assessment is annulled or cancelled for violation of principles of natural justice, the only legal effect flowing therefrom is that the assessment order is vacated. No final decision of the cause is available. In law, fresh proceedings are left open. Due to the infirmity, the order assailed is vacated. But, the assessment proceedings, once commenced by the filing of a return or by the issue of a statutory notice, is not terminated. It, therefore, follows that when the Appellate Tribunal cancels an order of assessment for violation of the principles of natural justice, fresh proceedings are left open and it is open to the assessing authority to start fresh proceedings and effect the final assessment order. No further direction was necessary from the Appellate Tribunal in the said matter. This is the effect in law, as could be seen from the decision in Guduthur Bros. v. Income-tax Officer [1960] 40 ITR 298 (SC) at page 300 and Superintendent (Tech. I), Central Excise v. Pratap Rai AIR 1978 SC 1244 at page 1245, para 5. The position in law is clear. Even without a direction of the Appellate Tribunal or an order of remit by the Appellate Tribunal, it was open to the assessing authority to start afresh the assessment proceedings and pass final orders. We make this position clear and hold that in pursuance to the order passed by the Appellate Tribunal dated 23rd March, 1983, in T.A. No. 812 of 1977, it is open to the Revenue to start the assessment proceedings afresh and pass a fresh assessment order for the relevant assessment year.

3. The above tax revision case is disposed of as above.