Star Health and Allied Insurance Company Ltd. Vs Commissioner of ST Large Taxpayers Unit (Madras High Court)
Introduction:
The recent judgment by the Madras High Court in the case of M/s Health and Allied Insurance Company Ltd. v. the Commissioner of State Tax, Chennai [W.P. No. 30494 of 2023 dated October 20, 2023] highlights the significance of granting a fair opportunity of hearing to taxpayers in assessment proceedings. The court’s decision revolves around the key issue of whether the short period provided for filing a reply to a show cause notice violates the legal rights of the assessee. This article delves into the facts of the case, the issues raised, and the court’s ruling on this matter.
Madras High Court in above case held that, the granting short period of time to file reply would not amount to the fair opportunity of hearing to assessee, as the contravention of the said principle would lead to the violation of the legal right of the assessee to defend during the adjudication proceeding.
Facts:
M/s Star Health and Allied Insurance Company Ltd. (“the Petitioner”) was issued a Notice by the Revenue Department (“the Respondent”) to which the Petitioner filed a reply. The Petitioner without taking into consideration the reply filed, issued a Show Cause Notice dated April 21, 2023 (“the Impugned SCN”) (First Hearing). The Petitioner was issued a notice (Second Hearing) for personal hearing on June 20, 2023. The Petitioner was issued another notice dated June 21, 2023 (Third Hearing) for personal hearing and further fixed the hearing on June 23, 2023 for the production of documents relied upon by the Petitioner in the reply filed. The Petitioner requested some time for furnishing the documents. However, the Respondent rejected the Petitioner’s request on the ground that three hearing opportunities have already been granted and passed Assessment Order dated June 29, 2023 (“Impugned Order”)
Aggrieved by the Impugned SCN and Impugned Order, the Petitioner filed a writ petition before the Hon’ble Madras High Court on the ground that Impugned SCN was issued without taking into consideration the reply filed by the Petitioner and the Petitioner was not granted a fair opportunity by the Respondent by granting short period of time for filing reply, thereby violating the principles of natural justice.
Issue:
Whether the Respondent granting short period of time to file reply would amount to fair opportunity of hearing to assessee?
Held:
The Hon’ble Madras High Court in the case of W.P. No. 30494 of 2023 held as under:
