2011 (3) TMI 1778 - HC - VAT and Sales Tax

Summary

Issues involved: Challenge to assessment order u/s 25(1) of KVAT Act for the year 2008-09 on grounds of procedural irregularities and violation of natural justice.

Issue 1 - Procedural Irregularities:
The petitioner challenges Ext. P3 assessment order, alleging violation of mandatory procedure and principles of natural justice. Petitioner contends that objections were submitted with supporting documents, but were unilaterally discarded without a hearing. Cites various court decisions emphasizing the importance of the opportunity for a hearing under Section 25(1) to be substantive. Seeks quashing of the assessment order.

Issue 2 - Respondent's Defense:
Respondent's counter-affidavit states that objections were duly considered, and reasons for rejection were provided in the assessment order. Petitioner took adjournments for filing objections, submitted necessary declarations, and sought time for additional documents. Respondent asserts that a personal hearing was conducted on the date of filing the reply. Raises objections against the petitioner's contentions on the merits of the assessment.

Judgment:
After considering the submissions, the court focuses on whether an effective opportunity of hearing was provided post objections filing. Notes lack of details regarding the personal hearing mentioned in the counter-affidavit. Emphasizes that the opportunity for a hearing under Section 25(1) is not a mere formality, requiring a notice for personal hearing based on objections before finalizing the assessment. Finds lack of compliance with mandatory procedure and violation of natural justice in the impugned order. Allows the writ petition, quashes Ext. P3, and directs the respondent to reconsider the matter, providing a personal hearing to the petitioner and allowing document submission. Orders a fresh assessment within one month from the judgment's receipt.