Court sets aside orders under KVAT Act for assessment years 2011-2016 due to lack of hearing

The court set aside the impugned orders made under Section 25(1) of the KVAT Act for assessment years 2011-2016, due to a lack of proper opportunity for a hearing, directing the matter to be restored for fair disposal. The petitioner, a medical institute, contended that the re-examination of claimed Gp percentage was unwarranted, emphasizing compliance with statutory obligations. The court stressed the importance of providing a clear opportunity for a hearing in assessment proceedings, ensuring adherence to principles of natural justice.

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Issues:
Challenge to orders under Section 25(1) of KVAT Act for multiple assessment years, violation of principles of natural justice.

Analysis:
The petitioner, a medical institute, challenged orders made under Section 25(1) of the KVAT Act for assessment years 2011-2016, alleging illegality and violation of natural justice principles. The lead case, W.P(C) No. 11838 of 2019, questioned the assessment order for 2011-2012, with other writ petitions filed for subsequent years. The petitioner contended that re-examination of claimed Gp percentage was unwarranted, as they were compliant with statutory obligations. The respondent issued notices proposing reassessment, leading to objections from the petitioner. The court directed the respondent to produce original records for scrutiny, revealing a lack of clear opportunity for personal hearing to the petitioner.

The chronology of events showed notices, replies, and objections being exchanged between the parties. Despite objections filed on 01.03.2019, no clear date for a hearing was provided by respondent No.1 before passing the impugned order on 25.03.2019. The court found that the events did not amount to affording a proper opportunity of hearing to the petitioner. The complexity of re-assessed issues and substantial financial implications necessitated a fair hearing, which was lacking in this case.

Due to the deficiency in affording a proper opportunity of hearing, the court set aside the impugned order and directed the matter to be restored to the file of respondent No.1. The petitioner was instructed to appear before respondent No.1 for assessment completion by a specified date. Similar orders for other assessment years were also set aside and restored for proper disposal. The court emphasized the importance of providing a clear opportunity for a hearing before passing such orders under Section 25(1) of the Act.

In conclusion, the writ petitions were disposed of accordingly, highlighting the significance of adhering to principles of natural justice and ensuring a fair process in assessment proceedings under the KVAT Act.

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