Natural justice in sales tax assessment requires meaningful access to seized material before final order is made.

Where a sales tax assessment is founded on seized incriminating slips and diaries, the assessee must be given a real and adequate opportunity to inspect that material and meet it before finalisation of the assessment. Mere reference to extracts in the proposal notice is insufficient if the authority refuses a meaningful re-inspection request after remand. The Madras HC held that such refusal breached the principles of natural justice, vitiated the assessment order under section 16 of the Madras General Sales Tax Act, and made the order liable to be quashed. The assessee was entitled to a fresh opportunity before further assessment proceedings.

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Issues: Whether the assessment order under section 16 of the Madras General Sales Tax Act was vitiated for denial of a real and adequate opportunity to inspect the seized slips and diaries and to submit objections before assessment.

Analysis: The assessment was founded on incriminating material seized from the assessee's premises and residence. After remand by the appellate authority, the assessee sought time to re-inspect the slips and diaries before filing objections, because the proposal notice made it clear that the material would again be used against him. The request was refused. In such circumstances, mere reference to extracts in the proposal notice was not enough to satisfy the requirement of a fair opportunity. Where the authority relies on seized material to make the assessment, the assessee must be given a real chance to examine that material and answer it before the final order is passed.

Conclusion: The assessment order was vitiated by violation of the principles of natural justice and was liable to be quashed. The assessee was entitled to a fresh opportunity before the assessing authority proceeded further.

Ratio Decidendi: When assessment is based on seized incriminating material, refusal to give the assessee a meaningful opportunity to inspect that material and respond to it before finalisation of the assessment amounts to breach of natural justice.

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