Case Alert – Advisory on Personal Hearing

The Hon’ble H.C of Allahabad directed that opportunity of personal hearing must be granted before passing any order under section 74 for imposing any tax and penalty

In the case of K.J. Enterprises v. State of U.P. Shekhar B. Saraf, J. Writ Tax No. 1544 of 2022 (February 01, 2024)

In the present case, opportunity of personal hearing was not provided to the petitioner before passing order of rejection of reply to show cause notice and imposition of penalty. Also, Appeal against said order was also dismissed without providing opportunity of personal hearing.

Held that Opportunity of personal hearing should be granted where a request is received in writing from person chargeable with tax or penalty, or where any adverse decision is contemplated against such person - Even if no request was received from person chargeable with tax or penalty, an opportunity of personal hearing must be granted if any adverse decision was contemplated against such person.

In light of the aforesaid discussion, the order cannot be allowed to pass through the legislative barriers of natural justice, erected to safeguard individual rights and prevent abuse of power. Orders passed without any opportunity of personal hearing are quashed and set aside. Consequential relief is allowed to the assesse and respondent is directed to grant an opportunity of personal hearing to the petitioner and thereafter pass a reasoned order in accordance with the law within a period of two months from date. This writ petition is, accordingly, allowed in favour of the assessee.