Personal hearing before adverse tax assessment order u/s75(4); unreasoned "not acceptable" rejection leads to quashing (4)

The dominant issue was whether an adverse tax order passed without granting a personal hearing violated principles of natural justice and reflected non-application of mind. The HC held that s.75(4) of the applicable tax statute mandates a personal hearing before any adverse order against an assessee, and the impugned order merely rejected the reply as "not acceptable" without reasoned consideration, evidencing audi alteram partem breach and arbitrary decision-making. Consequently, the impugned order was quashed and the writ petition was disposed of.

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Issues involved:
Violation of principles of natural justice by not granting personal hearing before passing an adverse order.

Detailed Analysis:
The petitioner challenged an Assessment order passed without granting personal hearing, contending a violation of Section 75(4) of the Central Goods & Service Tax Act, which mandates an opportunity of being heard before any adverse decision. The respondents sought a chance to file a reply. The court observed the impugned order as a clear breach of natural justice and lack of application of mind, solely rejecting the petitioner's reply without proper consideration. Emphasizing the mandatory nature of personal hearing under Section 75(4), the court quashed the order and directed a different Assessing Officer to consider the reply, provide a hearing, and pass a new order within eight weeks.

This judgment highlights the significance of adhering to principles of natural justice, particularly the right to a fair hearing before any adverse decision. It underscores the duty of authorities to thoroughly consider submissions and afford due process to parties involved. The court's intervention in setting aside the order underscores the importance of upholding procedural fairness in administrative actions, ensuring justice and preventing arbitrary exercise of power. The directive for a fresh assessment by a different officer underscores the court's commitment to rectifying procedural lapses and upholding the rule of law in tax matters.

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