2026 (3) TMI 1306 - HC - GST

Natural justice requires a meaningful hearing before adverse tax assessment; premature personal hearing made the order unsustainable.

An assessment order under Section 73(9) could not be sustained where the personal hearing was fixed before the expiry of the time allowed to file a reply ... Validity of the assessment order passed under Section 73(9), when the date of personal hearing was fixed prior to the last date for filing reply to the show cause notice - Effective opportunity of personal hearing - Breach of principles of natural justice Effective opportunity of personal hearing - HELD THAT:- The Court held that where the personal hearing was fixed before expiry of the time granted for submitting reply to the show cause notice, the hearing afforded could not be treated as an effective opportunity. Since even the Revenue could not dispute that such hearing was ineffective, the procedure adopted resulted in breach of principles of natural justice. On that ground, the assessment order was held unsustainable. [Paras 7, 8] The assessment order was quashed and the matter was remitted to proceed from the stage of show cause notice, with liberty to the petitioner to file reply and thereafter for a fresh personal hearing to be fixed. Final Conclusion: The writ petition was disposed of by quashing the assessment order on the ground that the opportunity of hearing was illusory, since the hearing date preceded the last date for filing reply. The matter was remitted to the Assessing Officer for fresh proceedings from the show cause notice stage. Issues: Whether the assessment order passed under Section 73(9) could be sustained when the date of personal hearing was fixed prior to the last date for filing reply to the show cause notice, thereby depriving the assessee of an effective opportunity of hearing.Analysis: The show cause notice granted time to file reply up to a later date, but the personal hearing was fixed earlier. Such sequencing made the hearing ineffective and inconsistent with the statutory scheme governing determination of tax liability, which contemplates a meaningful opportunity to respond before adverse adjudication. The breach of this fair hearing requirement amounted to violation of the principles of natural justice.Conclusion: The assessment order could not be sustained and was quashed. The matter was remitted to the Assessing Officer to resume from the stage of the show cause notice, permit filing of reply, and thereafter fix a fresh date for personal hearing.