2024 (12) TMI 57 - HC - GST

Assessment authority must provide adequate reasoning when rejecting rectification applications under Section 161

M/s. Suriya Cement Agency, Represented by its Proprietor Salai Sivakumar Vidya Versus The State Tax Officer (ST), The State of Tamil Nadu, Chennai, Union of India

The Madras HC allowed a petition challenging an assessment order and rectification application rejection. The court found the assessment authority failed ... Challenge to Order of Assessment and order passed in the Rectification Application - error apparent on the face of record or not - HELD THAT:- A perusal of the order does not also indicate that there had been no error apparent on the record to reject the rectification. He had only extracted the tables indicating the figures which the petitioner is liable to pay. There is also no reasonings as to why there is no error apparent on the face of the record. For this reason, the impugned order dated 02.02.2024 is liable to be set aside. If pursuant to a Rectification Application, if a rectification is made and if it adversely affects the assessee, Proviso 3 contemplates an opportunity of hearing to be given. However, when an Rectification Application is made at the instance of assessee and the rectification is being sought to be rejected without considering the reasons for rectification or by giving reasons as to why such rectification could not be entertained. It is also imperative that the assessee to be put on notice. The order of rectification passed by the first respondent dated 02.02.2024 is contrary to the provisions of Section 161 and in that aspect, the same alone is set aside and the Rectification Application filed by the petitioner shall be taken afresh by the first respondent and after giving an opportunity to the petitioner, the first respondent shall pass appropriate orders and in accordance with law. Petition allowed. Issues:Challenge to Order of Assessment and Rectification Application rejection.Analysis:The Writ Petition challenges the Order of Assessment and the rejection of the Rectification Application. The petitioner contends that the rectification application was filed within the given time, but was rejected without reasons or an opportunity for a hearing. The petitioner argues that the order should be set aside with directions to the first respondent. On the other hand, the Additional Government Pleader argues that reasons are not necessary for rejecting the application and that the Authority can reject it if no apparent error is found. The Pleader also mentions that an opportunity of hearing is required only when the rectification order is detrimental to the assessee's interest. The Pleader asserts that since the petitioner did not indicate any apparent error in the application, no interference is necessary, and requests the Court to dismiss the Writ Petition.The Court notes that the Rectification Application was made by the petitioner, and the order rejecting it did not provide reasons for the decision. The Court finds that there was no indication of any apparent error in the record to justify the rejection. The Court disagrees with the Government Pleader's argument that no personal hearing is required when the application is made by the assessee. The Court highlights that the Proviso to Section 161 mandates an opportunity for hearing when an order adversely affects the assessee. The Court emphasizes that principles of natural justice require giving notice to the assessee when rejecting a rectification application made by them.Based on the above analysis, the Court holds that the order of rectification passed by the first respondent is contrary to Section 161 provisions. The Court sets aside the order and directs the first respondent to reconsider the Rectification Application, giving the petitioner an opportunity for a hearing before passing appropriate orders. The Court allows the Writ Petition with no costs, and the connected miscellaneous petition is closed.