Natural justice requires a proper hearing before ex parte VAT liability orders and consequential notices can stand.

An ex parte liability order under the Bihar Value Added Tax framework was treated as unsustainable where the dealer was not given a proper opportunity to explain or defend against the assessment. On that basis, the consequential notice issued under the same framework also could not stand, because it flowed from an order made without fair hearing. The matter was remitted for fresh hearing and decision after affording the dealer an opportunity of hearing, reflecting the application of natural justice to fiscal proceedings.

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Issues: Whether an ex parte assessment/liability order and the consequential notice were liable to be set aside for want of proper opportunity of hearing and defence under the Bihar Value Added Tax framework.

Analysis: The order under Section 33 of the Bihar Value Added Tax, 2005 was recorded as ex parte. The Court found that the petitioner had not been given a proper opportunity to explain itself or defend against the liability created. In these circumstances, and in the interest of fair play, the consequential notice issued under Sections 31 and 39 of the Bihar Value Added Tax, 2005 could not stand.

Conclusion: The impugned liability order and the consequential notice were set aside, and the matter was remitted for fresh hearing and decision after affording the petitioner an opportunity of hearing.

Ratio Decidendi: An ex parte fiscal order passed without affording a proper opportunity of hearing is liable to be set aside as contrary to the principles of natural justice.

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