Natural justice in reassessment proceedings: ex parte order set aside for lack of hearing and reasons, with remand.

An ex parte reassessment order under the U.P. Value Added Tax Act, 2008 was unsustainable where the assessee was denied an effective opportunity to reply, and the authority failed to deal with the objections already raised before the sanctioning authority. The High Court found no independent reasoning on the disputed input tax credit claim and held that the order merely repeated the reopening material without a reasoned adjudication. The order was set aside for breach of natural justice and want of reasons, and the matter was remanded for fresh consideration after affording a hearing.

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Issues: Whether the ex parte reassessment order passed under the U.P. Value Added Tax Act, 2008 was liable to be set aside for violation of the principles of natural justice and for being a non-speaking order.

Analysis: The challenge was confined to denial of effective hearing in reassessment proceedings. The record showed that the petitioner sought time to file a reply to the reassessment notice, but the request was rejected because the proceedings were nearing limitation. The reassessment order was passed ex parte without considering the petitioner's objections already placed before the sanctioning authority and without recording any independent reasons on the entitlement to input tax credit. The order therefore did not reflect application of mind to the objections raised and amounted to a summary reiteration of the reopening material rather than a reasoned adjudication.

Conclusion: The ex parte reassessment order was unsustainable and was set aside as violative of natural justice and as a non-speaking order. The matter was remanded to the assessing authority for fresh consideration after affording the petitioner an opportunity of hearing.

Ratio Decidendi: A reassessment order passed without adequate opportunity of hearing and without dealing with the assessee's objections on merits is liable to be set aside for breach of natural justice and want of reasons.

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