Fair valuation in undervaluation disputes requires disclosed evidence, dealer response, and proper proof beyond MRP or secret surveys.

Undervaluation allegations cannot be sustained merely by referring to maximum retail price, because retail price may differ from actual market value and dealer circumstances. A fair valuation requires relevant comparative material, such as sales of similar goods, the dealer's own records, and other market evidence. A market survey used against the dealer must be disclosed and tested through an opportunity to respond; material gathered behind the dealer's back should not form the sole basis for adverse action. Where goods remain seized and valuation is unresolved, the proper course is release on security and a fresh determination after both sides are allowed to lead evidence.

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Issues: (i) Whether seizure of goods on the ground of undervaluation could be justified merely by reference to the maximum retail price and a market survey made behind the dealer's back; (ii) Whether the order of the Commissioner required interference and the matter remitted for fresh determination of the value of the goods.

Issue (i): Whether seizure of goods on the ground of undervaluation could be justified merely by reference to the maximum retail price and a market survey made behind the dealer's back.

Analysis: The value of goods cannot be determined only from the maximum retail price, because the retail price may be inflated and actual sale value may differ according to the market and the dealer's circumstances. A proper valuation requires relevant material such as comparison with similar goods, the dealer's own sale records, and other market evidence. A market survey relied upon against the dealer cannot be used unless it is disclosed to the dealer and the dealer is given an opportunity to meet it; evidence collected behind the party cannot be acted upon as a fair basis for adverse action.

Conclusion: Seizure and valuation based solely on MRP and undisclosed market survey were not sustainable in law.

Issue (ii): Whether the order of the Commissioner required interference and the matter remitted for fresh determination of the value of the goods.

Analysis: Since the goods had remained seized for a long period and no tax demand had yet been raised, the matter required a fresh and fair determination of the true wholesale value. The appropriate course was to release the goods on security, furnish the market survey material to the dealer, and permit both sides to adduce evidence before the assessing authority on the question of valuation.

Conclusion: The Commissioner's order was set aside and the matter was remanded for fresh decision on valuation after giving both sides an opportunity to lead evidence.

Final Conclusion: The dealer obtained relief against the seizure and adverse valuation, but the question of the correct value of the UPSs was left open for fresh adjudication by the Commissioner in accordance with natural justice.

Ratio Decidendi: Where undervaluation is alleged, adverse action cannot rest merely on MRP or a market survey collected behind the affected party's back; the affected party must be supplied the material and given a fair opportunity to contest valuation before a final determination is made.

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