Fair hearing requires disclosure of adverse third-party material before an assessment based on it can stand.

An assessment based on third-party denials cannot be sustained unless those denials are disclosed to the assessee and a fair opportunity to rebut them is given. Here, the adverse finding that the assessee had falsely disclosed consignee details rested on written denials allegedly obtained from the purported consignees, but those materials were not furnished during the assessment. As the assessee could not effectively meet the allegation without access to the foundation of the demand, the proceedings were held to be vitiated by breach of natural justice. The assessment order and consequential demand notice were therefore set aside for want of reasonable opportunity of hearing.

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Issues: Whether the assessment order and consequential demand notice could be sustained when the assessee was not furnished with the written denials allegedly obtained from the purported consignees, resulting in denial of a reasonable opportunity of hearing.

Analysis: The assessment proceeded on the basis that the disclosed consignees had denied the importation of goods on their behalf and that, therefore, the assessee had made false disclosure of names and addresses. Those written denials formed the material foundation of the adverse finding, yet they were not supplied to the assessee during the assessment proceedings. Without access to that material, the assessee could not effectively meet the charge or rebut the allegation that the consignee details were false. The assessment was therefore vitiated by breach of the requirement of fair hearing.

Conclusion: The assessment order and the consequential demand notice were unsustainable and were set aside for want of reasonable opportunity of hearing.

Ratio Decidendi: An assessment founded on adverse third-party material cannot be sustained unless that material is furnished to the assessee and a fair opportunity is given to rebut it.

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