Natural justice requires hearing before rejecting a rectification application under the M.P. VAT Act; rejection without hearing is unsustainable.

An assessee's rectification application under Section 54 of the M.P. Value Added Tax Act cannot be rejected without first giving a prior opportunity of hearing. The provision permits correction of clerical, arithmetical and omission-based mistakes, and while it expressly requires notice and hearing before rectification that would enhance tax or reduce refund, its silence on rejection does not exclude natural justice. The Court held that where a statutory remedy exists to seek correction and exclusion is not express, the principles of natural justice are implied. The rejection orders were set aside and the matter was remitted for fresh consideration after hearing the assessee.

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Issues: Whether an assessee's application for rectification under Section 54 of the M.P. Value Added Tax Act can be rejected without affording a prior opportunity of hearing.

Analysis: Section 54 empowers rectification of clerical, arithmetical, and omission-based mistakes in an existing order. The provision expressly requires notice and hearing when rectification would enhance tax or reduce refund, but is silent on hearing the applicant-assessee when the rectification request is to be rejected. The Court followed the settled interpretation that, where a statutory remedy is provided to seek correction of an order, the principles of natural justice are ordinarily read into the provision unless excluded. The earlier co-ordinate Bench view holding that an assessee must be heard before disposal of a rectification application was treated as still holding the field.

Conclusion: A prior opportunity of hearing is mandatory before deciding an assessee's rectification application under Section 54 of the M.P. Value Added Tax Act, and rejection without such hearing is unsustainable.

Final Conclusion: The impugned rejection orders were set aside and the matter was left open for fresh consideration after giving the assessee an opportunity of hearing.

Ratio Decidendi: Where a statute permits an assessee to seek rectification of an order but does not expressly exclude hearing, the principles of natural justice are implied and the application cannot be decided adversely without affording a prior opportunity of hearing.

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