Natural justice in reassessment requires disclosure of relied-upon documents; withholding the inspection report made the assessment unsustainable.

Withholding an inspection report and other relied-upon material in reassessment proceedings violates natural justice because a mere oral hearing does not amount to a reasonable opportunity where adverse documentary evidence is used against the assessee. Access to the material proposed to be relied upon is part of effective hearing, and an assessment founded on undisclosed adverse material is unsustainable. The reassessment order was therefore set aside, and the matter was remanded with a direction to furnish the inspection report and other relied-upon documents before completing a fresh assessment after proper hearing.

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Issues: Whether denial of a copy of the inspection report and other relied-upon material vitiated the reassessment for breach of natural justice; and whether the assessment order was liable to be set aside and the matter remanded.

Analysis: The reassessment was founded on an inspection report prepared by the enforcement authority, yet the assessee had specifically sought a copy of that report before replying to the notice. Mere opportunity of oral hearing was held insufficient where material evidence used against the assessee was withheld. Reasonable opportunity of hearing includes access to documentary material proposed to be relied upon by the department, and an order based on undisclosed adverse material amounts to an illusory hearing. The assessment order's own reasoning showed that the inspection report had in fact been relied upon, making the denial of the report fatal to the validity of the reassessment.

Conclusion: The reassessment order was unsustainable for violation of natural justice and was set aside, with a direction to furnish the inspection report and other relied-upon documents and to redo the assessment after giving proper opportunity.

Final Conclusion: The writ petitions succeeded, and the matter was sent back for fresh assessment after disclosure of the material relied upon and an effective hearing to the assessee.

Ratio Decidendi: Where the department relies on adverse documentary material in reassessment proceedings, withholding that material from the assessee before completion of the assessment violates the principles of natural justice and renders the order liable to be set aside.

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