Fair hearing in tax penalty proceedings requires effective opportunity to be heard; order set aside and remitted.

A penalty order under Section 67(1) of the Kerala Value Added Tax Act, 2003 was found unsustainable because the assessee was not given an effective opportunity of hearing. The challenge was based on the failure to properly communicate or consider the adjournment request before the order was passed, which compromised procedural fairness in the quasi-judicial process. As the record showed undue haste and resultant prejudice, the order was set aside and the matter was remitted for fresh consideration and disposal in accordance with law after affording a proper opportunity to be heard.

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Issues: Whether the assessment penalty order passed under Section 67(1) of the Kerala Value Added Tax Act, 2003 was liable to be set aside and the matter remitted for fresh consideration on the ground that the petitioner was not given a fair opportunity of hearing.

Analysis: The challenge centred on the contention that the request for adjournment was not properly communicated or considered before passing the order, with the result that the petitioner was denied an effective opportunity to participate in the proceedings. The order was examined in the context of the requirement of fair play in quasi-judicial proceedings, and the record indicated that the decision had been taken with undue haste at the cost of procedural fairness. In view of the absence of effective opportunity and the resulting prejudice, the order could not be sustained.

Conclusion: The impugned order was set aside and the matter was remitted to the respondent for fresh consideration and disposal in accordance with law.

Final Conclusion: The petitioner succeeded in obtaining interference with the penalty order, and the proceedings were sent back for reconsideration after giving an effective opportunity to be heard.

Ratio Decidendi: An order passed in quasi-judicial tax proceedings without affording an effective opportunity of hearing, where procedural fairness is compromised, is liable to be set aside and remitted for fresh disposal.

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