Natural justice in eligibility determinations requires disclosure of adverse enquiry material and a fair chance to rebut disputed facts.

An eligibility certificate based on genuine purchase vouchers and identifiable supplier details cannot be finally rejected on disputed material gathered behind the applicant's back. Where the authority relies on an enquiry report suggesting a fictitious dealer or false bill particulars, the report must be disclosed and the applicant must be given a fair opportunity to contest it. Because the controversy turned on contested facts requiring verification, including possible further enquiry into the evidence, a conclusive determination was not permissible without observance of natural justice. The rejection was therefore set aside and the matter remitted for fresh consideration after hearing the applicant.

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Issues: Whether the rejection of the eligibility certificate could be sustained without giving the applicant an opportunity of being heard on the enquiry material regarding the alleged selling dealer and the genuineness of the purchase vouchers, and whether the matter required remand for fresh consideration.

Analysis: The eligibility claim under the notification depended on genuine purchase vouchers showing actual purchase of plant and machinery from an identifiable dealer. The material relied on by the authority suggested that the selling dealer was fictitious and that the registration particulars in the bills were false, but the enquiry report itself was not produced and the applicant was not afforded an opportunity to controvert its contents. Since the core controversy turned on disputed facts requiring verification, including possible bank-level enquiry and assessment of evidence, a conclusive finding could not be recorded without observance of the principles of natural justice.

Conclusion: The rejection order could not stand and the matter had to be remanded to the Assistant Commissioner for fresh decision after giving the applicant an opportunity of hearing.

Ratio Decidendi: Where an administrative tax determination rests on disputed factual material gathered behind the back of the affected party, the decision must be set aside and the matter remitted for fresh consideration after compliance with natural justice.

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