Opportunity of personal hearing is mandatory before passing adverse order with liability: HC

Case Details: Mohan Agencies v. State of U.P. - [2023] 148 taxmann.com 323 (Allahabad)

Judiciary and Counsel Details

• • Pritinker Diwaker, ACJ. & Saumitra Dayal Singh, J.
  • Vishwjit for the Petitioner.
  • C.S.C. for the Respondent.

Facts of the Case

The petitioner received a notice seeking his reply within 30 days. It submitted reply and an adverse order was passed. In the impugned order demand in excess to Rs. 10 crores was raised against the petitioner. It filed writ petition to challenge the adjudication order on the ground that the opportunity of hearing was not granted.

The Revenue contended that the petitioner was denied opportunity of hearing because it had tick marked the option ‘No’ against the option for personal hearing.

High Court Held

The Honorable High Court noted that this Court has already laid down by way of principle of law that assessee is not required to request for opportunity of personal hearing and it is mandatory for the authority to afford such opportunity before passing an adverse order. The Court also noted that marking of “NA” would be of no legal consequence and minimal opportunity of hearing shall be necessary as this opportunity would ensure observation of natural justice.

In the instant case, the order created huge liability and such opportunity would have ensured that authority shall pass appropriate order and allow better appreciation at appellate stage. Therefore, the Court held that the impugned order was to be set aside and matter was remitted to Adjudicating Authority to issue fresh notice.