Case Law Details
Suriya Cement Agency Vs State Tax Officer (ST) (Madras High Court)
Madras High Court held that proviso 3 to section 161 of the CGST Act provides that it is mandatory to grant an opportunity of being heard if rectification order is detrimental to the interest of assessee.
Facts- The challenge in the Writ Petition is the Order of Assessment and also the order passed in the Rectification Application. Petitioner contended that the Rectification Application of the Order of Assessment dated 20.12.2023 was filed within the given time. However, the first respondent without assigning any reasons as to how the order of assessment does not suffer from any apparent error and that too without giving any opportunity of hearing has rejected the application of rectification.
Conclusion- Held that the provisio indicates that when an order is being made adverse to the assessee, then he should be given an opportunity of being heard when the rectification adversely affects any person. The principles of natural justice had been inbuilt by way of the 3rd Proviso to Section 161. If pursuant to a Rectification Application, if a rectification is made and if it adversely affects the assesse, Proviso 3 contemplates an opportunity of hearing to be given.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The challenge in the Writ Petition is the Order of Assessment and also the order passed in the Rectification Application.
2. Heard Mr. S. Karunakar, learned counsel for the petitioner, Mr. R. Sureshkumar, learned Additional Government Pleader appearing on behalf of the first and second respondents and Mr. K. Gokul, learned counsel appearing on behalf of the third respondent.
3. The learned counsel for the petitioner would contend that the petitioner had filed a Rectification Application of the Order of Assessment dated 12.2023, within the given time. However, the first respondent without assigning any reasons as to how the order of assessment does not suffer from any apparent error and that too without giving any opportunity of hearing has rejected the application of rectification. Therefore, he would submit that the order impugned herein would have to be set aside with a direction to the first respondent.
4. On the contrary, the learned Additional Government Pleader would vehemently contend that the reasons need not be attributed in rejecting the rectification application. All that is required to be looked at by Authority as to whether based upon the rectification application, there had been an error apparant when the Authority had come to a conclusion and if there is no error apparant, the Authority can reject the Rectification Application without assigning reason. He would further submit that the Proviso apprehended to Section 161 of CGST Act mandating an opportunity of hearing would only arise, when the Assessing Officer suo motu initiates action for rectification and if such rectification order is detrimental to the interest of the assessee only then an opportunity of hearing should be granted.
5. In the present case, an application had been made by the petitioner himself and in his application, he had not indicated the error apparant for the Assessing Officer to exercise his powers under Section 161 and therefore he would submit that no interference is required and prays this Court to dismiss the Writ Petition with liberty to the petitioner to work out his remedy in the manner known to law.
6. I have considered the submissions made by the learned counsels appearing on either side and perused the materials available on record.
7. It is an admitted fact that the petitioner had made a Rectification Application. The order of rectification which is impugned would indicate that for the reasons given in the annexure to the said order, the Rectification Application is rejected.
8. 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 reasoning’s 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. Even though, strenuous efforts had been made by the learned Additional Government Pleader that no personal hearing need to be given when an application had been made at the instance of the assesse, I am not in agreement with the learned Additional Government Pleader. The Provision indicates that when an order is being made adverse to the assessee, then he should be given an opportunity of being heard when the rectification adversely affects any person. The principles of natural justice had been inbuilt by way of the 3rd Proviso to Section 161. If pursuant to a Rectification Application, if a rectification is made and if it adversely affects the assesse, 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
9. For the aforesaid reasons, I am inclined to hold that 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. If any such order is made in the Rectification Application, it is for the petitioner to work out his remedy in the manner known to law.
10. With the above observations, this Writ Petition is allowed. However, there shall be no order as to costs. Consequently, connected miscellaneous petition is closed.
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