Natural justice in tax assessment requires personal hearing and independent consideration of objections before adverse orders are sustained.

Assessment orders were set aside where the assessing authority failed to afford the dealer a mandatory personal hearing and did not independently deal with the objections raised against the proposal notices. The Madras HC held that reliance mainly on the inspection report, without recording application of mind to each objection, breached natural justice and could not sustain the assessment, particularly where penalty was imposed. The matter was remitted for fresh assessment with a personal hearing and independent consideration of the objections.

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Issues: Whether the assessment orders were vitiated for failure to grant personal hearing and for not independently considering the objections raised against the proposal notices.

Analysis: The petitioner had filed replies to the notices of proposal, but the assessing authority rejected them by relying substantially on the inspection report and without recording an independent consideration of each objection. The order also disclosed that no personal hearing had been afforded before concluding the assessment, even though penalty under Section 27(3) of the Tamil Nadu Value Added Tax Act, 2006 had been imposed. The Court referred to Circular No.7/2014 dated 03.02.2014, which contemplates mandatory personal hearing, and held that an assessment cannot be sustained when objections are brushed aside without independent application of mind.

Conclusion: The assessment orders were set aside for breach of natural justice and the matter was remitted for fresh assessment after granting personal hearing and considering the objections independently.

Ratio Decidendi: An assessment order passed without affording mandatory personal hearing and without independently dealing with the dealer's objections is liable to be set aside and remitted for fresh adjudication.

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