Hindustan Sanitaryware And Industries Limited vs. The Asst.Commissioner

Facts

The petitioner, Hindustan Sanitaryware & Industries Limited (now HSIL Limited), filed a writ petition before the High Court of Kerala challenging an assessment order (Ext.P8) passed against them under the Kerala Value Added Tax (KVAT) Act. The petitioner's primary contention was that they were not afforded an opportunity of a personal hearing before the assessing authority passed the impugned order. This, according to the petitioner, violated the principles of natural justice. The respondent was the Assistant Commissioner, Special Circle-III, SGST Department.

Held

The Court held that the assessment order (Ext.P8) was vitiated by a violation of the rules of natural justice because the petitioner was not afforded a personal hearing before its passing. The Court accepted the submission of the learned Government Pleader that the petitioner had not been heard. Consequently, the Court quashed Ext.P8 order. The respondent was directed to pass fresh orders after providing the petitioner with an opportunity to be heard, either through video conferencing or personal appearance. The respondent was mandated to pass these fresh orders within three months from the date of receipt of a copy of the judgment. The ratio decidendi is that an assessment order passed without affording the assessee a proper opportunity of hearing is invalid and liable to be set aside.

Key Issues

1. Whether the assessment order (Ext.P8) passed by the respondent is vitiated by a non-compliance with the rules of natural justice, specifically the requirement of affording an opportunity of hearing to the petitioner? The petitioner argued that the assessment order was passed without providing them with a proper hearing, thereby violating the principles of natural justice. The respondent, through the learned Government Pleader, conceded that the petitioner was indeed not heard prior to the passing of Ext.P8 order. No other arguments were recorded for either side.