Natural justice and undervaluation reassessment requirements under sales tax law demanded fresh appellate disposal after proper hearing.

An ex parte appellate order under the Tamil Nadu General Sales Tax Act, 1959 could not stand where the assessee was denied an effective opportunity of hearing, because section 31A(3) read with rule 27(5) requires reasonable opportunity before disposal of the appeal. The reassessment based on alleged undervaluation was also procedurally vulnerable, as section 12A and rule 18C require inquiry into relevant market factors and an independent assessment by the authority, not mere reliance on Central Excise materials. The appellate authority failed to examine the legality of the reassessment and the matter required fresh disposal after proper hearing.

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Issues: Whether the ex parte appellate order and the revised assessment made under the Tamil Nadu General Sales Tax Act, 1959 were sustainable in law when the assessee was denied a proper opportunity of hearing and the assessing authority had not followed the statutory procedure for an undervaluation-based revision.

Analysis: The statutory scheme under section 31A(3) of the Tamil Nadu General Sales Tax Act, 1959 read with rule 27(5) of the Tamil Nadu General Sales Tax Rules, 1959 requires a reasonable opportunity before disposal of the appeal. Rule 52 of the Tamil Nadu General Sales Tax Rules, 1959 governs service, and the appellate record showed that repeated summons were issued, but the appeal was ultimately disposed of without a meaningful adjudication on merits. On the assessment side, section 12A of the Tamil Nadu General Sales Tax Act, 1959 permits reassessment for undervaluation only after inquiry and after considering the relevant factors contemplated by rule 18C of the Tamil Nadu General Sales Tax Rules, 1959. The revised order substantially rested on materials from the Central Excise proceedings and did not disclose an independent enquiry by the assessing authority into prevailing market price or the statutory factors required for an undervaluation case. The appellate authority also failed to examine whether the reassessment under section 12A of the Tamil Nadu General Sales Tax Act, 1959 was legally and procedurally valid.

Conclusion: The appellate order could not be sustained, and the matter required fresh disposal by the appellate authority in accordance with law after affording an effective opportunity to the assessee.

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