Natural justice in reassessment and second purchase exemption fail where fair opportunity was given and burden of proof was not discharged.

A reassessment was treated as compliant with natural justice where the assessee was informed of the material, given time to inspect records, and could have examined the relevant mills on its own behalf; the refusal to summon them did not invalidate the proceeding. The court also applied the settled rule that an assessee claiming second purchase exemption must prove the existence of an earlier taxable sale or purchase. On the facts, that burden was not discharged, the finding that the assessee was the first purchaser was sustained, and the levy was upheld.

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Issues: (i) Whether the reassessment proceedings were vitiated for violation of the principles of natural justice in refusing to summon the decorticating mills or their representatives and in denying access to their records; (ii) Whether the assessee established that the disputed transactions were only second purchases and not taxable first purchases under the sales tax law.

Issue (i): Whether the reassessment proceedings were vitiated for violation of the principles of natural justice in refusing to summon the decorticating mills or their representatives and in denying access to their records.

Analysis: The material relied upon by the assessing authority was not third-party accounts or private statements, but earlier orders of the statutory Tribunal holding the decorticating mills not to be dealers. The assessee had been informed of the relevant particulars and was given time to inspect the records and take suitable action. The assessee could also have examined the mills or their representatives on its own behalf, but did not do so. In these circumstances, the opportunity afforded was held to be sufficient compliance with natural justice.

Conclusion: The plea of violation of natural justice failed.

Issue (ii): Whether the assessee established that the disputed transactions were only second purchases and not taxable first purchases under the sales tax law.

Analysis: The Court applied the settled rule that an assessee claiming exemption on the footing of a second sale or second purchase must show an earlier taxable sale or purchase. On the facts, the assessee did not discharge that burden. The concurrent finding that the decorticating mills were not first purchasers and that the assessee was the first purchaser was supported by relevant material and disclosed no legal infirmity warranting interference in revision.

Conclusion: The assessee failed to prove that the transactions were second purchases, and the levy was upheld.

Final Conclusion: The revision failed on both the procedural and substantive challenges, and the tax assessment was sustained.

Ratio Decidendi: Where the assessee is given a fair opportunity to meet the material relied upon, and the taxing authority bases its conclusion on prior adjudicatory findings rather than private third-party accounts, there is no breach of natural justice; a claim of second purchase exemption must be proved by the assessee by establishing the necessary prior taxable transaction.

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