MASANY CONSTRUCTION EQUIPMENT PVT. LTD. v. STATE TAX OFFICER & ORS.

Introduction

This judgment emphasizes that an assessment order passed under Section 73 must be a speaking order dealing with the taxpayer’s explanations and contentions. The Kerala High Court held that merely rejecting the taxpayer’s reply by stating that it is “not convincing” or “non-explanatory” without assigning reasons violates the requirement of a reasoned adjudication. Even where the taxpayer fails to attend the personal hearing, the adjudicating authority is still obligated to pass a speaking order after considering the reply and available records.

Background of the Case

The petitioner, Masany Construction Equipment Pvt. Ltd., is engaged in the business of supplying construction equipment, heavy machinery and spare parts.