2022 (3) TMI 928 - HC - VAT and Sales Tax

Validity of assessment order - opportunity of hearing not provided - violation of the principles of natural justice - HELD THAT - Admittedly, before issuing Ext.P4 order of assessment, the assessee was not given an opportunity of hearing - It is evident from a reading of the impugned order, that, the opportunity for filing written objections and for personal hearing was granted to the petitioner on the same day, i.e., 03.03.2021, which was adjourned to 10.03.2021, on which day the petitioner preferred its objections. Thus it is evident that, after filing the reply, no further opportunity of hearing was granted to the petitioner. It is evident from the circumstances of the present case that the assessee was not granted an opportunity of hearing. On 10.03.2021, the objections were filed and the same was considered and found to have no merit and is seen rejected. However, the request for personal hearing, sought for by the petitioner, was not even considered by the officer - the principles of natural justice was infringed while issuing Ext.P4. The impugned order of assessment is therefore liable to be set aside. However, the interest of justice demands that the assessing officer passes fresh orders of assessment in a time bound manner, after granting an opportunity of hearing to the petitioner. The Assessing Officer is directed to pass fresh orders after granting an opportunity of hearing to the petitioner, within a period of three months from the date of receipt of a copy of this judgment - Petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to assessment order under section 25(1) of the Kerala Value Added Tax Act, 2003 on grounds of violation of principles of natural justice.

Analysis:
The petitioner, an assessee registered under the Act, challenged an assessment order issued under section 25(1) of the Kerala Value Added Tax Act, 2003, alleging a violation of natural justice principles as no opportunity of hearing was granted before the order was issued.

For the assessment year 2017, a penalty was imposed on the petitioner under section 47(6) of the Act, leading to proceedings under section 25(1) initiated by the assessing officer through a notice dated 22.02.2021. The petitioner responded by filing objections on 10.03.2021, specifically requesting an opportunity for a hearing. However, the assessment order was issued on 12.03.2021 without granting the requested hearing, prompting the writ petition.

The assessing officer's order mentioned granting an opportunity for written objections and a personal hearing on 03.03.2021, adjourned to 10.03.2021 for receiving the petitioner's reply. After perusing the reply, the officer proceeded with the assessment without further hearing, which the petitioner contended violated natural justice principles.

The petitioner cited precedents emphasizing the necessity of granting a hearing after assessing objections, as failure to do so infringes on natural justice. In this case, the assessing officer did not provide a subsequent opportunity for a hearing after reviewing the petitioner's objections, leading to a conclusion that principles of natural justice were violated.

The Court found merit in the petitioner's argument and set aside the impugned assessment order, directing the assessing officer to pass fresh orders within three months after providing a proper opportunity for hearing. This decision was made to uphold the principles of natural justice and ensure a fair assessment process for the petitioner.

Therefore, the writ petition was allowed, and the assessing officer was instructed to conduct a fresh assessment with due regard to providing the petitioner an opportunity for a hearing within a specified timeframe to ensure procedural fairness and compliance with natural justice principles.