Natural justice requires a real personal hearing before reassessment is finalised, and the order was set aside

A reassessment order under the Karnataka Value Added Tax Act was set aside because the record did not show that the taxpayer had a personal hearing before finalisation. Although the order stated that a hearing had been granted, there was no material indicating the date or actual hearing of the taxpayer or its authorised representative. As the taxpayer had sought an opportunity to explain multiple transaction details, fairness required a meaningful hearing before reassessment. The matter was remanded for fresh consideration after affording an opportunity of being heard.

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Issues: Whether the reassessment order passed under Section 39 of the Karnataka Value Added Tax Act, 2003 was liable to be set aside for denial of personal hearing and breach of natural justice.

Analysis: The petitioner had specifically sought an opportunity of personal hearing before the reassessment was completed. The impugned order recorded that a hearing had been granted, but it did not indicate the date on which the petitioner or its authorised representative was actually heard. In the absence of material showing that a real personal hearing had taken place, the recording of such hearing could not be accepted. Since the petitioner required an opportunity to explain numerous transaction details, fairness demanded that a personal hearing be afforded before the reassessment was finalised.

Conclusion: The reassessment order was set aside for violation of natural justice and the matter was remanded for fresh consideration after affording the petitioner an opportunity of being heard.

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