2017 (3) TMI 440 - HC - VAT and Sales Tax

Principles of natural justice - though objections were called for and hearing was posted on 05.11.2016 in Ext.P3, the assessee admittedly filed his objections only on 29.11.2016. The assessment proceedings at that point was not over and the Assessing Officer took note of the objections in the order passed. The Assessing Officer has stated in Ext.P5 that the assessee could have availed of the opportunity for hearing on 29.11.2016, when the objection was filed - Held that - the order of assessment itself has to be set aside on grounds of violation of principles of natural justice - petition allowed - decided in favor of petitioner.

Summary

Issues Involved:
1. Violation of principles of natural justice due to inadequate opportunity for hearing in assessment proceedings.

Analysis:
The petitioner challenged the assessment order (Ext.P5) citing lack of a proper hearing opportunity, leading to a violation of natural justice principles. The petitioner was issued a notice (Ext.P3) for a hearing on 05.11.2016, but failed to attend, submitting objections later. The Assessing Officer finalized the assessment without a hearing, justifying it by claiming the petitioner could have requested a hearing when filing objections. The court noted a common issue of inadequate hearing opportunities leading to challenges based on natural justice principles. A previous judgment criticized the practice of composite notices for objections and hearings. However, a subsequent Division Bench decision allowed assessments without hearings if not requested by the assessee, emphasizing the importance of Assessing Officers providing a hearing opportunity even without a specific request to prevent legal challenges. In this case, the petitioner's objections were considered after the hearing date, and the Assessing Officer failed to provide a requested personal hearing, leading to the order's invalidation on natural justice grounds.

The court emphasized the significance of granting a proper hearing opportunity to avoid challenges based on natural justice principles. The judgment set aside the assessment order (Ext.P5) without commenting on its merits. Another case (W.P(C) No.750/2017) faced a similar issue where objections were filed after the hearing date, leading to the invalidation of the assessment order (Ext.P8) for the same reason. Both petitioners were directed to appear before the Assessing Officer for a hearing, and assessments were to be completed within a month from the hearing date. The court directed the Commissioner of Commercial Taxes to issue instructions to prevent similar litigation on natural justice grounds in the future. Ultimately, both writ petitions were allowed in favor of the petitioners, highlighting the importance of procedural fairness and adherence to natural justice principles in assessment proceedings.