Personal hearing in reassessment is part of reasonable opportunity; denial of the requested hearing vitiated the assessment

Denial of a personal hearing in reassessment proceedings vitiated the assessment where the dealer had filed detailed objections and specifically requested such hearing. The Court held that reasonable opportunity of showing cause includes a personal hearing when demanded, and that refusal in the face of a binding departmental circular was arbitrary and perverse. The reassessment orders reversing input tax credit were therefore unsustainable and were quashed. The matters were remanded for fresh consideration after granting personal hearing and passing a reasoned order on the merits.

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Issues: Whether the assessment orders reversing input tax credit were liable to be set aside for denial of personal hearing before finalising the reassessment.

Analysis: The petitioner had filed detailed objections and had specifically sought a personal hearing. The refusal to grant such hearing was held to be arbitrary and perverse, especially in view of the binding departmental circular and the settled position that a reasonable opportunity of showing cause includes an opportunity of personal hearing when specifically demanded. The impugned assessment orders were found to be contrary to the requirements of fairness in procedure and were therefore unsustainable.

Conclusion: The assessment orders were quashed and the matters were remanded for fresh consideration after affording personal hearing and passing a reasoned order on merits.

Ratio Decidendi: Where a dealer specifically seeks personal hearing in reassessment proceedings, denial of such hearing violates the requirement of reasonable opportunity and vitiates the assessment order.

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