Personal hearing required before rectification enhances tax or penalty under sales tax law, making the increase unsustainable.

A rectification under the Tamil Nadu General Sales Tax Act that enhances assessment or penalty must comply with the statutory requirement of notice and a reasonable opportunity of being heard. The text treats that safeguard as including a personal hearing where civil consequences are proposed. On that basis, an enhanced penalty imposed through a revised rectification order could not be sustained because the dealer had not been given the required hearing before the increase. The operative effect is that enhancement under rectification provisions must follow the prescribed hearing procedure before any higher tax or penalty is imposed.

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Issues: (i) Whether a rectification order under section 55 of the Tamil Nadu General Sales Tax Act, 1959, which has the effect of enhancing assessment or penalty, can be made without affording the dealer a personal hearing. (ii) Whether the enhanced penalty imposed under section 12(5)(iii) in the revised order was valid in the absence of such personal hearing.

Issue (i): Whether a rectification order under section 55 of the Tamil Nadu General Sales Tax Act, 1959, which has the effect of enhancing assessment or penalty, can be made without affording the dealer a personal hearing.

Analysis: The statutory proviso to section 55(1) requires notice and a reasonable opportunity of being heard before any rectification that enhances assessment or penalty. The majority treated the expression as imposing a mandatory hearing requirement, not merely a right to file written objections. It held that where the statute itself prescribes the manner of hearing, the safeguard must be strictly followed, and a personal hearing is part of that opportunity when enhancement is proposed.

Conclusion: The revision under section 55 could not validly enhance the assessment or penalty without granting a personal hearing, and the assessee succeeded on this issue.

Issue (ii): Whether the enhanced penalty imposed under section 12(5)(iii) in the revised order was valid in the absence of such personal hearing.

Analysis: The enhanced penalty was part of the rectification that increased the burden on the assessee. Since the rectification was made under section 55 and the dealer had not been given the required personal hearing before enhancement, the penalty imposed in the revised order could not be sustained. The majority upheld the Tribunal's result on a different reasoning and rejected the Revenue's challenge.

Conclusion: The enhanced penalty was invalid and the assessee was not liable to sustain it.

Final Conclusion: The Revenue's revisions failed, and the Tribunal's order cancelling the enhanced penalty was sustained. The decision affirms that enhancement under rectification provisions carrying civil consequences must comply with the statutory hearing requirement.

Ratio Decidendi: Where a taxing statute expressly requires notice and a reasonable opportunity of being heard before rectification that enhances assessment or penalty, the authority must afford a personal hearing as part of that statutory safeguard before making the enhancement.

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