Personal hearing in tax assessment is mandatory where natural justice is breached, requiring fresh consideration

Denial of a personal hearing before completion of assessment under the Tamil Nadu Value Added Tax Act, 2006 was held to breach the principles of natural justice. Although notices were issued and documents were filed, the assessee was not heard in person before the assessment order was passed. The merits of the Input Tax Credit claim were not finally decided. The assessment order was set aside and the matter was remitted for fresh assessment after granting a personal hearing and allowing supporting materials to be furnished.

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Issues: Whether the assessment order was liable to be set aside for denial of personal hearing before completion of assessment under the Tamil Nadu Value Added Tax Act, 2006.

Analysis: The assessment was challenged on the ground that no personal hearing had been afforded before completion of the assessment. The record showed that notices had been issued and documents had been filed, but the petitioner had not been heard in person before the order was passed. In these circumstances, the denial of an opportunity of personal hearing amounted to a breach of the principles of natural justice. The merits of the Input Tax Credit claim were not finally adjudicated and the matter was directed to be reconsidered after granting an opportunity of hearing and allowing reliance materials to be furnished.

Conclusion: The assessment order was set aside and the matter was remitted for fresh assessment after granting personal hearing to the petitioner.

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