Tvl. Shri Bharathi Weaves Vs Commercial Tax Officer (Madras High Court)
Order passed just a day before personal hearing date was clear violation of natural justice and same was set aside
Conclusion: Premature issuance of the order nullified the opportunity for the taxpayer to present its defense and documents, which was fundamental to fair adjudication. Therefore, the impugned order was set aside and the department was directed to re-adjudicate the matter.
Held: Assessee was issued show cause notice for incorrect tax liability in the assessee’s annual return for AY 2020-21. Assessee sought additional time to submit documents, and the respondent fixed personal hearing on 11.02.2025. However, the assessment order was passed prematurely on 10.02.2025, i.e., a day before the scheduled hearing. Assessee contended that denial of personal hearing vitiated the proceedings. Respondent’s counsel fairly admitted that the order was passed prior to the scheduled date of hearing. It was held that premature issuance of the order nullified the opportunity for the taxpayer to present its defense and documents, which was fundamental to fair adjudication. Therefore, it set aside the impugned order and directed the department to re-adjudicate the matter. Assessee had been allowed to file a fresh reply with documents within three weeks. Further, the Court ordered Respondent to issue a clear 14-day notice for personal hearing, after which a speaking order was to be passed strictly in accordance with law and based on assessee’s submissions.
