Natural justice in tax assessment requires a personal hearing before revising turnover and denying input tax credit.

An assessment under the Tamil Nadu Value Added Tax Act, 2006 was held vulnerable to challenge where the dealer was given written opportunity but no personal hearing before the order was passed. The court treated the proviso to Section 27(2) as requiring a reasonable opportunity to explain disputed entries, including annual report figures and audit materials, before finalising revision of assessment involving denial of input tax credit and alleged suppression of turnover. On the facts, the absence of personal hearing amounted to a breach of natural justice, so the assessment order was set aside and the matter remitted for fresh consideration after hearing the dealer.

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Issues: Whether the assessment order was vitiated for denial of personal hearing and violation of the principles of natural justice, warranting setting aside of the order and remand for fresh consideration.

Analysis: The dispute concerned revision of assessment under the Tamil Nadu Value Added Tax Act, 2006, including denial of input tax credit and alleged suppression of turnover. The writ petitioner had submitted written objections, but the grievance was that the authority passed the order without affording a personal hearing to explain the entries in the annual report and to clarify the audit materials. The proviso to Section 27(2) of the Tamil Nadu Value Added Tax Act, 2006 requires a reasonable opportunity to show cause before passing an order, and the request for reconsideration after hearing was treated as justified in the facts of the case. The order was therefore found to suffer from breach of natural justice.

Conclusion: The impugned assessment order was set aside and the matter was remitted to the respondent for fresh consideration after affording the writ petitioner a personal hearing.

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