Reasonable opportunity in assessment proceedings is essential before relying on adverse material against the assessee.

Adverse material collected by the Assessing Authority cannot be relied upon to frame an assessment unless the assessee is first given a real and adequate opportunity to rebut it. Here, the dealer was called upon to explain entries in a seized diary and the genuineness of transactions with specified purchasers, but the decisive notice was served only on the evening before the next day's hearing. That left no meaningful opportunity to meet the material proposed for use against the assessee. The assessment was therefore held vitiated for want of reasonable hearing, and the remaining question did not require separate adjudication.

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Issues: Whether the dealer was given a reasonable opportunity of being heard before the assessment was framed.

Analysis: The dealer was required to explain material collected by the Assessing Authority, including entries in a seized diary and the genuineness of transactions with specified purchasers. The decisive notice calling for the explanation was served only on the evening preceding the hearing fixed for the next day, leaving no real opportunity to meet the material proposed to be used against the assessee. Adequate opportunity is a necessary requirement before adverse material can be relied upon in assessment proceedings.

Conclusion: The dealer was not given reasonable opportunity of being heard. The answer is in the negative, in favour of the assessee and against the department.

Final Conclusion: The reference was answered by holding that the assessment was vitiated for want of reasonable opportunity, while the remaining question did not survive for separate adjudication.

Ratio Decidendi: Adverse material collected by the Assessing Authority cannot be used to frame an assessment unless the assessee is first afforded a real and adequate opportunity to rebut it.

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