Rectification requests need fair consideration and personal hearing before rejection of cryptic endorsements under tax law

Cryptic, non-speaking endorsements rejecting rectification applications under the Karnataka Value Added Tax Act were held unsustainable because the applicants were not given an opportunity of personal hearing. The court found that fair consideration of rectification requests requires an intelligible order and observance of hearing before disposal. The endorsements were therefore set aside, and the rectification applications were remitted for fresh consideration after affording personal hearing.

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Issues: Whether the cryptic endorsements rejecting the rectification applications under Section 69(1) of the Karnataka Value Added Tax Act, 2003, without affording an opportunity of personal hearing, were sustainable and required interference.

Analysis: The rectification applications were filed against the reassessment orders, and the endorsements disposing of those applications were found to be non-speaking. Since no opportunity of hearing had been afforded, the procedure adopted was inconsistent with the requirement of fair consideration before passing orders on the rectification requests. In these circumstances, the matter required reconsideration after granting personal hearing.

Conclusion: The endorsements were set aside and the rectification applications were remitted for fresh consideration after affording an opportunity of personal hearing.

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