Natural justice in KVAT assessments requires a personal hearing after objections are filed if the explanation is not accepted.

Under Section 25(1) of the Kerala Value Added Tax Act, 2003, the assessing authority must give a reasonable opportunity of personal hearing after written objections are filed if the explanation is not accepted. The Court noted that notice had been issued and objections were submitted, but the objections were rejected without granting the requested hearing. That omission was held to violate natural justice, and the assessment order was set aside for reconsideration after affording a proper hearing.

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Issues: Whether the assessment order passed under Section 25(1) of the Kerala Value Added Tax Act, 2003 was liable to be set aside for violation of natural justice on the ground that no effective opportunity of personal hearing was granted after the objections were filed.

Analysis: The assessment proceedings were initiated on the basis of penalty imposed under Section 47(6) of the Kerala Value Added Tax Act, 2003. Although notice was issued and written objections were filed, the objections were taken up and rejected without affording the petitioner the requested personal hearing. The requirement under Section 25(1) is not confined to calling for objections alone; where the assessing authority is not satisfied with the explanation, a reasonable opportunity of being heard must follow before completing the assessment. Since that opportunity was not granted, the assessment suffered from breach of natural justice.

Conclusion: The assessment order was set aside and the matter was directed to be reconsidered after granting an opportunity of hearing.

Ratio Decidendi: Under Section 25(1) of the Kerala Value Added Tax Act, 2003, when the assessing authority does not accept the dealer's written objections, it must afford a reasonable opportunity of personal hearing before finalising the assessment.

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