Assessment Order Must be passed after Personal Hearing

[Abhishek Raja]

An assessment order passed without a personal hearing violates the principles of natural justice and is liable to be quashed. - Madras High Court

Assessment Order was passed on 28-Dec-2022 determining the tax liability as follows:

CGST: Rs.4,44,292/-

SGST: Rs.4,44,292/- 

Penalty: Rs.8,88,584/-

This Assessment Order was passed without providing Opportunity of being heard.

As per Section 75(4) of GST Laws personal hearing ought to have been afforded to the petitioner since an adverse decision has been taken by the respondent under the impugned assessment order.

Section 75 (4) of the GST Act reads as follows:

"(4) An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person."

High Court upheld the right of personal hearing to the assessee is mandatory whenever the respondent contemplates any adverse decision in the assessment proceedings. Opportunity of hearing is to be given to assessee where adverse decision is contemplated.

SENDHIL KUMAR VERSUS THE STATE TAX OFFICER, TIRUVALLUR ASSESSMENT CIRCLE, CHENNAI - 2023 (2) TMI 588 - MADRAS HIGH COURT

Honorable Supreme Court in the case of M/S RADHA KRISHAN INDUSTRIES VERSUS STATE OF HIMACHAL PRADESH & ORS. - 2021 (4) TMI 837 - SUPREME COURT has held that there is no discretion on whether or not to grant an opportunity of being heard.

"audi alteram" is one of the basic pillars of natural justice which means no one should be condemned unheard. 

In ASSISTANT COLLECTOR OF CUSTOMS AND SUPERINTENDENT, PREVENTIVE SERVICE CUSTOMS, CALCUTTA AND OTHERS VERSUS CHARAN DAS MALHOTRA - 1971 (2) TMI 41 - SUPREME COURT, it was held by Supreme Court that Power, under Proviso to Sec. 110 of Customs Act, cannot be exercised without an opportunity of being heard is given to the person from whom the goods are seized.