Mandatory hearing before adverse sales tax assessment required; clerical misdescription of the provision does not invalidate jurisdiction.

An assessment under the U.P. Sales Tax Act was not invalidated merely because the order incorrectly mentioned section 7(2) instead of section 7(3); read as a whole, the reference was a clerical slip and did not defeat jurisdiction. The assessment was nevertheless quashed because the dealer was not given the mandatory opportunity to explain the alleged sales discrepancy before an adverse conclusion was drawn. The proviso to section 7(3) required that hearing, and its omission breached natural justice. The clerical misdescription carried no legal consequence, but the failure to afford the statutory hearing rendered the assessment unsustainable.

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Issues: (i) whether the assessment order was jurisdiction because it mentioned section 7(2) instead of section 7(3) of the U.P. Sales Tax Act, 1948; (ii) whether the assessment order was vitiated for want of the opportunity of hearing required before making an assessment under section 7(3).

Issue (i): whether the assessment order was without jurisdiction because it mentioned section 7(2) instead of section 7(3) of the U.P. Sales Tax Act, 1948.

Analysis: The order, read as a whole, showed that the assessing authority was not satisfied about the correctness and completeness of the return and had proceeded on the footing that the return was incorrect. The reference to section 7(2) in the superscription was only a clerical slip and did not convert the order into one passed without jurisdiction.

Conclusion: This ground failed and was against the petitioner.

Issue (ii): whether the assessment order was vitiated for want of the opportunity of hearing required before making an assessment under section 7(3).

Analysis: The record did not show that the petitioner was asked to explain the alleged discrepancy in sales and that he failed to do so. On the contrary, the order itself indicated that further enquiries were made after the books were examined, and the conclusion about concealed sales was reached only after those enquiries were completed. The mandatory proviso to section 7(3) required an opportunity to meet the discrepancy before an adverse assessment could be made, and that safeguard was not observed. The resulting assessment offended the principles of natural justice.

Conclusion: This ground succeeded and was in favour of the petitioner.

Final Conclusion: The assessment order was quashed for breach of the mandatory hearing requirement, while the mistaken reference to section 7(2) was treated as a mere clerical error without jurisdictional consequence.

Ratio Decidendi: A sales tax assessment made under the equivalent of section 7(3) cannot stand unless the dealer is given the mandatory opportunity to explain discrepancies before an adverse conclusion is reached; a clerical misdescription of the provision does not by itself invalidate the order.

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