Turnover assessment must rest on disclosed material and fair hearing, or enhanced additions may be quashed in certiorari.

A writ of certiorari under Article 226 is maintainable where a taxing order is alleged to contain jurisdictional error, patent illegality, or breach of natural justice; the Article 227 objection does not bar such review. In turnover assessments, additions must rest on material showing a real nexus between the entries relied on and taxable sales, and the assessee must be given fair disclosure and an effective opportunity to rebut the material, including cross-examination where necessary. Where the enhanced turnover is based on undisclosed or insufficient material and a fair hearing is denied, the assessment and consequential orders are liable to be quashed, while admitted turnover already returned remains undisturbed.

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Issues: (i) whether the petition was maintainable under Article 226 of the Constitution of India for issuance of a writ of certiorari, notwithstanding the respondents' objection that the matter lay only within Article 227; and (ii) whether the assessment and enhancement of turnover were vitiated for want of material, denial of fair opportunity, and breach of natural justice.

Issue (i): whether the petition was maintainable under Article 226 of the Constitution of India for issuance of a writ of certiorari, notwithstanding the respondents' objection that the matter lay only within Article 227.

Analysis: The petition challenged the taxing order on the ground that it was illegal and amenable to certiorari. The jurisdiction under Article 226 extends to correcting jurisdictional errors, patent errors apparent on the face of the record, and violations of law or natural justice. A writ court does not sit in appeal over evidence, but it may interfere where the impugned order is vitiated by lack of jurisdiction or manifest illegality.

Conclusion: The petition was maintainable under Article 226, and the jurisdictional objection failed.

Issue (ii): whether the assessment and enhancement of turnover were vitiated for want of material, denial of fair opportunity, and breach of natural justice.

Analysis: The assessment was founded on bank accounts, transfer entries, and statements recorded behind the petitioners' back, but the material report was not supplied in time and the requested witnesses were not made available for cross-examination. In tax matters, turnover must have a rational nexus with business transactions and cannot rest on mere suspicion or conjecture. Where the authority proceeds without disclosing the material and without affording a fair chance to meet it, the resulting assessment is contrary to natural justice and is liable to be struck down. The disclosed turnover alone remained undisputed, while the additions were unsupported by legally sufficient material connecting the entries to taxable sales within the State.

Conclusion: The assessment and the consequential orders were unsustainable and were quashed.

Final Conclusion: The writ petition succeeded because the taxing authority's enhanced assessment was set aside for lack of a legally sustainable nexus and for denial of a fair hearing, while the admitted turnover already returned and taxed was left undisturbed.

Ratio Decidendi: A taxing assessment enhancing turnover must rest on material establishing a real nexus with taxable and must be made after fair disclosure and opportunity of rebuttal; otherwise, the order is liable to be quashed in certiorari.

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