Assessment order set aside for denying adequate time to respond violating natural justice principles

The Madras HC allowed the writ petition, setting aside an assessment order dated 29.06.2023 for violation of natural justice principles. The court found that petitioner was given insufficient time (less than 36 hours) to respond after notice was uploaded online on 21.06.2023, followed by two working days when petitioner couldn't access the website. Despite appearing on the next working day requesting time for document production, petitioner was denied adequate opportunity to file an effective reply. The matter was remanded for fresh consideration with proper adherence to natural justice principles.

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Issues Involved:
1. Violation of principles of natural justice.
2. Insufficient time provided for responding to notices.
3. Lack of a speaking order by the respondent.

Summary:

Violation of Principles of Natural Justice:
The petitioner challenged the assessment order dated 29.06.2023 and the show cause notice dated 21.04.2023, arguing that the impugned orders suffer from a violation of principles of natural justice. The petitioner claimed that the second respondent did not consider their replies and failed to provide adequate reasons for rejecting their explanations. The court noted that the respondent-Department had provided three opportunities for hearing but did not afford sufficient time for the petitioner to file an effective reply, thereby violating the principles of natural justice.

Insufficient Time Provided for Responding to Notices:
The petitioner contended that the time provided for responding to the notices was insufficient. The first notice dated 21.04.2023 gave 14 days, the second notice dated 16.06.2023 gave 4 days, and the third notice dated 21.06.2023 gave less than 36 hours for the petitioner to respond. The court observed that the third notice was uploaded on the e-Portal at 9.52 p.m. on 21.06.2023, calling for a hearing on 23.06.2023 at 11.00 a.m., which did not provide a fair opportunity for the petitioner to produce the required documents.

Lack of a Speaking Order by the Respondent:
The court found that the impugned order dated 29.06.2023 did not provide clear reasons for rejecting the petitioner's explanations. The order merely stated that the petitioner's reply could not be accepted without specifying why the explanations were unsatisfactory. The court emphasized the need for a speaking order that addresses all issues raised by the petitioner.

Conclusion:
The court concluded that the impugned orders were untenable due to the violation of principles of natural justice, insufficient time for response, and the lack of a speaking order. The assessment order dated 29.06.2023 was set aside, and the matter was remanded to the second respondent for fresh consideration. The court directed the second respondent to provide a fair opportunity for a personal hearing on 16.11.2023 and to pass a fresh, speaking assessment order by 12.12.2023. The writ petition was allowed, and the connected writ miscellaneous petition was closed. The matter was listed for reporting compliance on 14.12.2023.

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