Reasonable opportunity of hearing is the key safeguard; defective tax notice does not vitiate assessment without prejudice.

Under section 12(5) of the Orissa Sales Tax Act, the statutory requirement is a reasonable opportunity of hearing, and notice under Rule 22 is only the procedural means of giving that opportunity. A defective notice, or even omission of notice, does not by itself invalidate an assessment unless prejudice is shown; here, the dealer appeared, raised no timely objection, and showed no prejudice, so the assessments were upheld. A finding of fact is not binding where material evidence is ignored. Because the Tribunal failed to deal adequately with relevant slips, cash memos and notebook entries showing business activity, its annulment of the assessments could not stand.

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Issues: (i) Whether notice under section 12(5) of the Orissa Sales Tax Act, 1947 was mandatory for initiating assessment against an unregistered dealer and whether defects in such notice vitiated the assessments; (ii) whether the Tribunal's finding annulling the assessments was a binding finding of fact when material evidence had allegedly been ignored.

Issue (i): Whether notice under section 12(5) of the Orissa Sales Tax Act, 1947 was mandatory for initiating assessment against an unregistered dealer and whether defects in such notice vitiated the assessments.

Analysis: Section 12(5) requires the dealer to be given a reasonable opportunity of being heard before assessment is made. Rule 22 of the Orissa Sales Tax Rules, 1947 provides the machinery for issuing a Form VI notice, but the statutory requirement is the opportunity of hearing and not the notice as a condition precedent to jurisdiction. A defect in the notice or even omission to issue it does not by itself invalidate the proceedings unless prejudice is shown. On the facts, the dealer appeared, did not object to the notice at the assessment stage, and no prejudice was established.

Conclusion: Notice was not mandatory as a jurisdictional precondition, and the defective notice did not vitiate the assessments; the finding is against the assessee and in favour of the Revenue.

Issue (ii): Whether the Tribunal's finding annulling the assessments was a binding finding of fact when material evidence had allegedly been ignored.

Analysis: A finding of fact is not immune from interference where it is reached by ignoring material evidence or essential aspects of the record. The appellate authority had relied on slips, cash memos, the pocket notebook, and surrounding circumstances to record extensive business dealings in several commodities. The Tribunal did not deal with these materials sufficiently and its conclusion that there was nothing to show liability exceeding the statutory limit for the relevant period was based on exclusion of essential evidence.

Conclusion: The Tribunal's conclusion could not stand as a binding finding of fact because it ignored material evidence; the issue is against the assessee and in favour of the Revenue.

Final Conclusion: The reference was answered in the negative, and the annulment of the assessments was not sustained; the matter was decided in favour of the Revenue.

Ratio Decidendi: Under a taxing provision requiring a reasonable opportunity of hearing, notice is a procedural means of affording that opportunity and is not a jurisdictional prerequisite unless prejudice is shown; a factual finding ceases to be binding when it is rendered by ignoring material evidence essential to the issue.

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