2013 (7) TMI 821 - HC - VAT and Sales Tax

Violation of principal of natural justice - Opportunity of personal hearing not given - Held that - it is an undisputed fact that the petitioner had sought for such an opportunity for explanation in response to pre-assessment notice, which admittedly, has not been granted - Impugned order passed by the respondent is not in conformity with the statutory requirement and the binding judicial precedent of Suzion Infrastructure Services v. Commercial Tax Officer (WC), Ernakulam 2010 (6) TMI 677 - Kerala High Court - Decided in favour of Assessee.

Summary

Issues:
Challenge to order under Section 25 of KVAT Act for assessment year 2009-10. Failure to provide opportunity for personal hearing to the petitioner.

Analysis:
The petitioner challenged the order dated 7/5/2012 passed by the respondent under Section 25 of the KVAT Act for the assessment year 2009-10. The petitioner contended that upon receiving a pre-assessment notice (Ext.P1), they submitted a reply (Ext.P2) with actual facts and figures, requesting a personal hearing if their explanation was not accepted. However, the respondent finalized the proceedings without granting a personal hearing, leading to the impugned order (Ext.P3). The Court noted that the necessity for a personal hearing is not a mere formality, as established in previous judgments. A Division Bench had upheld the requirement for a personal hearing if requested by the party. It was undisputed that the petitioner had sought such an opportunity in their reply to the pre-assessment notice, which was not granted by the respondent, rendering the impugned order non-compliant with statutory requirements and judicial precedents.

The Court deliberated on whether the respondent's order complied with the law as declared by the Division Bench. It was evident from the record that the petitioner had indeed requested a personal hearing in response to the pre-assessment notice, which was not provided by the respondent. Consequently, the Court concluded that the impugned order did not meet the statutory requirements and binding judicial precedents. Therefore, the Court set aside the order (Ext.P3) without prejudice to the respondent's right to pass fresh orders after granting the petitioner a personal hearing in accordance with the legal obligations discussed in the judgment.

In conclusion, the writ petition was allowed, with no costs imposed on either party. The judgment highlighted the importance of providing a fair opportunity for a personal hearing in proceedings under Section 25 of the KVAT Act, emphasizing compliance with statutory requirements and established judicial principles.