Natural justice bars turnover assessment based on undisclosed market-rate material without fair opportunity to rebut.

Assessment orders that estimated tea turnover on the basis of undisclosed market-rate material, without supplying that material to the dealer or allowing a fair rebuttal, were held unsustainable. The dealer had produced books of account, invoices, bills, returns and supporting records, and no defect was found in them, yet the assessing authority rejected those records and adopted a higher sale price without disclosing the basis for that conclusion. Because an assessee must know and meet the material relied on against it, the orders were vitiated for breach of natural justice and set aside.

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Issues: Whether the assessment orders estimating turnover on the basis of an undisclosed market rate of tea, without supplying the material relied on to the dealer and without giving a fair opportunity to explain it, were sustainable in law.

Analysis: The dealer had produced its books of account, invoices, bills, returns and supporting records in response to the notice issued under section 9(2) of the Tripura Sales Tax Act, 1976. No defect was found in those records, but the assessing authority rejected them and adopted a higher sale price on the footing that the prevailing market rate was higher. The orders did not disclose the material or information relied upon for that conclusion. An assessment cannot rest on material not communicated to the assessee, because the assessee must know the case it has to meet and be given an opportunity to rebut the basis of the proposed addition.

Conclusion: The assessment orders were vitiated for breach of the requirement of fair hearing and could not be sustained; the challenge succeeded.

Ratio Decidendi: An assessment based on material or information not disclosed to the assessee, and not accompanied by a reasonable opportunity to meet it, is liable to be set aside for violation of natural justice.

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