Cross-examination required before relying on third-party statements in sales tax assessment; revisions not admitted.

Third-party statements used to sustain a sales tax assessment could not be relied on without giving the assessee a fair opportunity to cross-examine the declarants, especially where the assessees consistently denied the transaction and no independent supporting evidence existed. The Madras HC held that, on these facts, the assessing authority was bound to provide cross-examination before acting on adverse material and that no question of law arose for admission under section 38 of the Tamil Nadu General Sales Tax Act, 1959. The revenue's revisions were therefore not admitted and were dismissed.

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Issues: Whether the revisional court should admit the revenue's revisions under section 38 of the Tamil Nadu General Sales Tax Act, 1959, when the assessment was based on third-party statements and the assessees were not afforded an opportunity to cross-examine the declarants.

Analysis: The Tribunal had found that, although the third-party statements might implicate the assessees, those statements could not safely be acted upon without giving the assessees a fair opportunity to rebut them. The assessees had consistently denied the transaction, and there was no other specific evidence to support the assessment. On the facts, the authority was required to provide an opportunity for cross-examination before relying on the adverse statements. The court therefore found no question of law arising for admission.

Conclusion: The revisions were not admitted and were dismissed.

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