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2011 Supreme(Online)(KER) 4778
HIGH COURT OF KERALA
C.K. ABDUL REHIM, J
SREEJITH L – Appellant
Versus
COMMERCIAL TAX OFFICER – Respondent
WRIT PETITION (CIVIL) 2499/2011
The decision reaffirmed that the right to a personal hearing post-objection filing is a fundamental principle of natural justice under the KVAT Act.
Headnote:
KVAT - Assessment Procedure - KVAT Act - Section 25(1) - The court emphasized the mandatory requirement of personal hearing for the dealer after objections are submitted, interpreting that effective opportunity must be provided to ensure adherence to principles of natural justice, influencing the decision to quash the assessment order.
Fact of the Case:
The petitioner challenged the assessment order for 2009-10, arguing that the authority violated the mandatory personal hearing requirement under section 25(1) of the KVAT Act and denied natural justice by failing to consider objections properly.
Finding of the Court:
The court found that the assessing authority did not strictly comply with the requirement of providing an effective opportunity for a personal hearing after the objections were filed, concluding that this constituted a violation of natural justice.
Issues: Whether the assessing authority complied with the mandatory personal hearing requirement under section 25(1) of the KVAT Act during the assessment process.
Ratio Decidendi: The court established that the opportunity for personal hearing is not merely a formality but a critical aspect of due process, essential for ensuring that objections are adequately addressed and considered.
Final Decision: The court quashed the assessment order and directed a fresh hearing.
J U D G M E N T
Ext.P3 order of assessment finalised with respect to various period during the year 2009-10 is under challenge in this writ petition. The order of assessment is challenged without resorting to statutory remedy of appeal on the ground that, while finalising the assessment the respondent had failed to comply with the mandatory procedure contemplated under section 25(1) of the KVAT Act and that the assessment was finalised in violation of principles of natural justice.
2. According to the petitioner, when Ext.P1 proposal notice was received, he had submitted Ext.P2 objections. But the authority had rejected those objections and made a best judgment assessment, without affording any opportunity of hearing to the petitioner. It is contended that the personal hearing contemplated under section 25(1) of KVAT Act is mandatory and it is not an empty formality. If the objections are not acceptable to the assessing authority, the dealer should have been afforded with an opportunity of hearing, is the contention. The petitioner relies on a recent decision of this Court in Suzian Infrastructure Service Ltd. Vs. Commercial Tax Officer (W.C.), Ernakulam (2010(3) KHC 299 (Ker.) in support of the above contentions.
3. Heard ; learned government pleader appearing on behalf of respondent. It is contended that discrepancies pointed out with respect to maintaining of true and correct account was already admitted by the petitioner and contention of the petitioner is that such mistake happened only due to some bonafide error occurred in keeping the computerised account. But such an explanation could not be accepted in view of the fact that keeping of parallel set of invoices was even dictated. In a statement filed on behalf of respondent it is mentioned that on 25.11.2010 the dealer appeared for filing objections and at that time a hearing was conducted. Learned Government pleader also points out the observation contained in the impugned order of assessment to the effect that the dealer was given an opportunity of hearing in person and the observation to the effect that the dealer had appeared before the assessing authority on three occasions.
4. However, learned counsel appearing for the petitioner refuted the above said allegations, specifically contending that, after filing of the objections no opportunity of hearing was afforded to the petitioner and that even at the time of submitting the objections the petitioner was not heard, since the objections was send through one representative.
5. Even though I find that the assessing authority had elaborately considered all the objections raised, I am of the opinion that an effective opportunity of hearing, as contemplated under section 25(1) of the KVAT Act, was not seen strictly complied with. The opportunity for personal hearing as contemplated should be afforded after filing of the objections and that the dealer should be put to notice as to why the objections raised by him is not acceptable. Then only the dealer will get an effective opportunity to make contentions on the basis of such objections. In the case at hand there is no evidence forthwith coming to the effect that the dealer was given an opportunity of hearing with proper notice, on any date after filing of the objections. Therefore I am of the view that Ext.P3 order will not stand, since it was passed without affording an opportunity of hearing to the petitioner, as contemplated under section 25 (1) of the KVAT Act.
6. Under the above circumstances, Ext.P3 order is hereby quashed. The respondent is directed to reconsider the matter and to pass fresh orders, after affording an opportunity of hearing to the petitioner. Needless to say that the petitioner will be afforded with an opportunity to produce documents and records in support of his contentions. Fresh orders in this regard shall be issued as early as possible, at any rate within one month from the date of receipt of a copy of this judgment.
C.K.ABDUL REHIM, Judge ami/
