Natural justice in trade tax proceedings requires confrontation of adverse material before assessment or penalty can stand.

Assessment and penalty under the U.P. Trade Tax Act were challenged because the authorities relied on material, affidavits and a later investigative report without confronting the dealer or verifying the documents through departmental officials. The text states that natural justice required both sides' material to be verified and the dealer to be given a fair opportunity to rebut adverse evidence. On that basis, the Tribunal's order could not be sustained for want of sufficient opportunity, and the matter had to be remanded to the Joint Commissioner (Appeals) for fresh consideration. The penalty could not survive independently if the assessment itself failed.

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Issues: Whether the Tribunal could sustain the assessment and penalty orders after relying on material and a report that were not confronted to the dealer, and whether the matter should be remanded for fresh decision after due opportunity and verification.

Analysis: The assessment and penalty arose from an alleged failure to discharge trip sheets at the notified exit check-post, leading to a presumption of local sale and penalty under section 15A(1)(q) for breach of section 28B of the U.P. Trade Tax Act, 1948. The appellate authority had relied on documents and affidavits produced by the dealer without getting them verified by departmental officials, while the Tribunal placed reliance on a later report of the Economic Offences Wing without confronting the dealer with that material or affording an opportunity to rebut it. In these circumstances, principles of natural justice required that the material on both sides be properly verified and that both parties be given a fair opportunity before any adverse finding was recorded.

Conclusion: The Tribunal's order could not be sustained for want of sufficient opportunity to the dealer. The matter was required to be remanded to the Joint Commissioner (Appeals) for fresh consideration after due verification and opportunity to both sides. The penalty could not survive independently if the assessment failed.

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