Fair opportunity in tax assessments and proper party requirement invalidate adverse orders based on third-party statements and deceased dealers.

Assessments based on third-party statements require the assessee to be supplied with the relied-upon material and given a fair opportunity to cross-examine the witnesses; otherwise, the adverse findings cannot be sustained and the assessment must be set aside for fresh consideration. An assessment made in the name of a deceased dealer is invalid where the department has been informed of the death and proceedings are not continued against the legal representative in accordance with the governing statute; the matter must be taken up afresh against the proper person. The impugned assessments were set aside and remanded for adjudication after following due procedure.

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Issues: (i) Whether the assessment orders could be sustained when the assessee was not furnished the statements relied upon by the department and was denied an opportunity to cross-examine the witnesses whose statements formed the basis of the assessment; (ii) Whether an assessment made in the name of a deceased dealer was valid in the absence of action under section 15 of the Tamil Nadu General Sales Tax Act, 1959.

Issue (i): Denial of access to the statements relied upon in the assessment and refusal of an opportunity to cross-examine the witnesses affected the fairness of the proceedings. Where the department rests its conclusion on third-party statements, the assessee must be given a meaningful opportunity to test that material before adverse orders are made.

Conclusion: The assessment orders could not be sustained on this ground and were liable to be set aside and remitted for fresh consideration.

Issue (ii): An assessment against a dead person is not valid when the department is informed of the death and the proceedings are required to be continued against the legal representative in accordance with section 15 of the Tamil Nadu General Sales Tax Act, 1959. The legal effect of the death of the dealer could not be ignored, and the assessment had to be made against the proper person.

Conclusion: The assessment in the name of the deceased dealer was invalid and the matter had to be taken up afresh against the legal representative.

Final Conclusion: The impugned assessments were set aside and the matters were remanded for fresh adjudication after following the required procedure and affording the assessee due opportunity.

Ratio Decidendi: An assessment based on third-party statements cannot stand unless the assessee is given access to the material and a fair opportunity of cross-examination, and an assessment made against a deceased dealer is invalid unless proceedings are taken against the legal representative in accordance with the governing statute.

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