Personal hearing and export-sale classification required before reversing input tax credit and imposing penalty.

An assessment reversing input tax credit and imposing penalty was set aside because the matter had been decided without granting the petitioner a personal hearing, despite a specific request in the objections. The High Court held that the assessing authority must reconsider the relevant records and documents, including whether the sales qualified as the last sale preceding export under section 5(3) of the Central Sales Tax Act, 1956. The matter was remanded for fresh consideration, with directions to afford a personal hearing and pass a speaking order on the justification for reversal of input tax credit.

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Issues: Whether the assessment order reversing input tax credit and imposing penalty was liable to be set aside and the matter remanded for fresh consideration after affording personal hearing.

Analysis: The petitioner had challenged the assessment on the ground that the sales were the last sale preceding export and relied on earlier authority on the scope of section 5(3) of the Central Sales Tax Act, 1956. The assessment had proceeded without the petitioner being given a personal hearing, although the objections had specifically sought such hearing. In these circumstances, the matter required reconsideration on the basis of the relevant records and documents to determine whether the sale qualified as the last sale preceding export and whether the reversal of input tax credit was justified.

Conclusion: The assessment order was set aside and the matter was remanded to the assessing authority for fresh consideration after granting an opportunity of personal hearing and passing a speaking order.

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