Natural justice requires furnishing relied-on tax details before assessment; non-disclosure of KVATIS particulars vitiated the demand.

An assessment under Section 25(1) of the KVAT Act was found unsustainable where turnover details drawn from KVATIS were relied on against the assessee without supplying the requested particulars or giving effective assistance to obtain them from the source said to hold them. Proceeding with a substantial tax and interest demand in those circumstances deprived the assessee of a fair opportunity to respond, amounting to a violation of natural justice. The assessment order was therefore set aside.

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Issues: Whether the assessment order passed under Section 25(1) of the KVAT Act was liable to be set aside for violation of natural justice for non-furnishing of the details relied on against the assessee.

Analysis: The assessment was based on turnover details drawn from KVATIS, and the assessee had sought those details before filing a reply. The requested particulars were not furnished, nor was any effective assistance given to enable the assessee to obtain them from the source said to hold them. An assessment fastening substantial tax and interest liability was proceeded with despite this request, which deprived the assessee of a fair opportunity to answer the proposed demand.

Conclusion: The assessment order was unsustainable as it was passed in violation of the principles of natural justice and was set aside.

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