Natural justice in underbilling purchase orders: prior hearing is required, but preliminary report disclosure is deferred until the penalty stage.

Section 23-D of the Rajasthan Sales Tax Act and rule 63-B require a prior hearing before the Deputy Commissioner accepts a proposal to purchase allegedly underbilled goods. The purchase order is treated as a non-penal measure enabling purchase at bill value plus 10 per cent, so immediate supply of the preliminary enquiry report is not essential at that stage. The dealer's full right to challenge the underbilling allegation arises later at the penalty stage, when relied-upon material must be disclosed and cross-examination allowed. On that basis, the purchase order was not invalidated for breach of natural justice.

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Issues: Whether the order permitting purchase of goods under section 23-D of the Rajasthan Sales Tax Act, 1954 was vitiated for want of natural justice, including non-supply of the enquiry report and denial of hearing.

Analysis: Section 23-D and rule 63-B contemplate a prior opportunity of being heard before the Deputy Commissioner decides whether to accept the proposal for purchase of allegedly underbilled goods. The Court held that the purchase order is not a penal consequence but a measure to enable purchase at the bill value increased by 10 per cent, and therefore the immediate supply of the preliminary report or proposal was not essential at that stage. The Court further held that the dealer's substantive right to contest the allegation of underbilling becomes material in the subsequent penalty stage, where full opportunity, including disclosure of relied-upon material and cross-examination, must be afforded.

Conclusion: The purchase order was not invalidated for breach of natural justice, and the writ challenge failed.

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