Natural justice in reassessment satisfied where relied-on material was disclosed and confronted before the adverse order.

Natural justice was not breached in reassessment where the substance of the preliminary report alleging diversion of export sales and the fraud case report had been communicated to the dealer, and the material was confronted before the adverse order. The High Court held that separate supply of the original reports in copy was not invariably required if the relied-upon material had been brought to the dealer's notice through the notice and the representative's statement. On that basis, writ interference under Article 226 was refused and the reassessment was not quashed; the statutory appeal was left open with interim protection.

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Issues: Whether the reassessment order was vitiated for violation of the principles of natural justice on the ground that the preliminary report and fraud case report were not furnished to the dealer, and whether the writ court should interfere under Article 226 of the Constitution of India.

Analysis: The reassessment was founded on a preliminary report indicating diversion of export sales and on a fraud case report. The record showed that the substance of the preliminary report had been communicated through the order dated 16 January 2004 issuing notice under Rule 10 of the Central Sales Tax (Orissa) Rules, 1957, and that the fraud case report had also been confronted to the dealer's representative, whose statement was recorded. The material relied upon for reassessment was therefore brought to the dealer's notice. The authorities cited on certified copies and disclosure of material did not assist the petitioner, because they did not lay down a rule that the preliminary report or fraud report itself must invariably be furnished in copy in every case.

Conclusion: There was no violation of natural justice, and no ground was made out for interference in writ jurisdiction. The reassessment was not quashed.

Final Conclusion: The challenge to the reassessment failed, while liberty was left open to pursue the statutory appeal with consequential interim protection.

Ratio Decidendi: Where the substance of the material relied upon for reassessment is communicated to the dealer and the material is confronted before the adverse order is passed, the requirement of natural justice is satisfied even if the original preliminary or fraud reports are not separately furnished in copy.

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