Natural justice in best judgment assessment requires prior disclosure of adverse material; waiver cannot be inferred from mere silence.

Best judgment assessment requires prior disclosure of the reasons for rejecting declared turnover and a reasonable opportunity to respond to the material relied on, because natural justice demands that the dealer know and meet the adverse material before assessment is made. Waiver of that protection arises only from intentional relinquishment of a known right, with full knowledge of both the right and the material proposed to be used; mere presence, silence, or a statement is insufficient. As no show-cause notice was issued and survey material was used without prior disclosure, the plea of waiver failed and the best judgment assessments could not be sustained on the facts found, requiring reconsideration in accordance with law.

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Issues: Whether the assessee could be denied the statutory notice and opportunity to meet the material relied upon for best judgment assessment on the ground of waiver, and whether the assessments made without such opportunity could be sustained.

Analysis: The statutory scheme required the assessing authority to inform the dealer of the reasons for non-acceptance of the declared turnover and to afford a reasonable opportunity to reply before resorting to best judgment assessment. A waiver of such protection could arise only from an intentional relinquishment of a known right, and the assessee must have full knowledge of the right and of the material proposed to be used against him. Mere presence, statement, or silence could not substitute for notice of the adverse material. The rule of natural justice likewise required disclosure of the material so that the assessee could effectively meet it. Since no show-cause notice was given before rejecting the declared turnover and the survey material was used without prior disclosure, the plea of waiver was untenable.

Conclusion: The assessments based on best judgment could not be sustained on the facts found, and the matter required reconsideration in accordance with law.

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