M/S. Falcon International Drug Company vs. The Assistant Commissioner

Facts

The petitioner, M/s. Falcon International Drug Company, filed a writ petition challenging orders marked as Ext.P7 series. The petitioner contended that the assessing authority, the 1st respondent, failed to grant them a reasonable opportunity of being heard, despite a specific request. The core of the petitioner's grievance was the alleged unjust and arbitrary classification of their product by the 1st respondent, leading to a demand for a higher rate of tax. The petitioner relied on the judgment in Heinz India Ltd. vs. State of Kerala to support their argument regarding misclassification. The respondents, represented by the Government Pleader, opposed the writ petition.

Held

The Court held that the impugned orders at Exts.P7 to P7(b) suffered from a violation of the principles of natural justice because the petitioner was not granted an opportunity of hearing, despite making a specific request. The Court noted that this failure was evident from a perusal of the impugned orders themselves. Consequently, in the interest of justice, the Court decided to remit the matter back to the 1st respondent for fresh consideration. The ratio decidendi is that an assessment order passed without affording the assessee a reasonable opportunity of being heard is invalid and liable to be set aside on grounds of violating natural justice. The Court quashed and set aside the impugned orders and directed the petitioner to appear before the 1st respondent on 19.04.2021 at 11:30 a.m. for a hearing. The 1st respondent was directed to conclude the assessment within four weeks thereafter.

Key Issues

1. Whether the impugned orders, Ext.P7 series, passed by the 1st respondent (Assistant Commissioner, SGST Department) are liable to be quashed for violating the principles of natural justice by not granting the petitioner a reasonable opportunity of being heard, as mandated by law? Petitioner's Contention: The petitioner argued that the 1st respondent failed to provide them with a hearing despite a specific request, which is a violation of natural justice. They further contended that the classification of their product by the 1st respondent was unjust and arbitrary, leading to an incorrect demand for a higher tax rate. The petitioner relied on the decision in Heinz India Ltd. vs. State of Kerala to support their claim of misclassification. Revenue's Contention: The learned Government Pleader, representing the respondents, opposed the writ petition.