Real and effective personal hearing required before rejecting refund claims where opportunity to respond was indicated.

An adverse refund rejection cannot stand where the authority, after calling for documents and indicating a hearing, fails to afford a real and effective opportunity before passing the order. Although personal hearing is not statutorily mandatory for refund claims under the Tamil Nadu VAT framework, fairness required the assessee to be heard once the authority chose to proceed on that basis. The impugned orders were silent on any personal hearing and could not be salvaged by later explanation. The refund rejection orders were set aside and the refund applications were remitted for reconsideration after personal hearing and an opportunity to produce documents.

---

---

Issues: Whether the orders rejecting refund claims were liable to be set aside for want of a meaningful opportunity of personal hearing and for consequential reconsideration of the refund applications.

Analysis: The refund applications were decided after a short notice requiring production of documents, and the impugned orders did not record that any personal hearing had in fact been granted. Though personal hearing is not statutorily mandatory for refund claims under Section 18(3) of the Tamil Nadu Value Added Tax Act, 2006 read with Rule 11(2) of the Tamil Nadu Value Added Tax Rules, 2007, once the authority itself chose to call for documents and indicate a hearing, fairness required that the assessee be afforded a real opportunity to respond before adverse orders were passed. The authority could not improve the impugned orders by later explanation when the orders themselves were silent on the hearing.

Conclusion: The refund rejection orders were set aside and the refund applications were directed to be reconsidered after granting personal hearing and opportunity to produce documents.

Ratio Decidendi: Where an authority voluntarily extends an opportunity to furnish documents and a personal hearing before deciding a refund claim, the decision must comply with the requirement of a real and effective hearing, and an adverse order passed without such opportunity is liable to be set aside.

---