Natural justice requires disclosure of adverse material before assessment; non-supply of the verification report led to remand.

An adverse assessment cannot be sustained where the verification report relied on against the dealer was not furnished, because withholding that material denied an effective opportunity to meet the case. The dispute concerned entitlement to benefit under the ST-35 forms, and the sales were otherwise found genuine. Since the Tribunal had earlier directed disclosure of the report but the final order was passed without supplying it, the proceedings were vitiated on natural justice grounds. The adverse orders were set aside and the matter was remitted for limited reconsideration of the claim after furnishing the verification report to the assessee.

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Issues: Whether the adverse assessment and appellate orders could be sustained when the verification report relied upon against the dealer was not furnished to it, and whether the matter required remand for fresh examination of the claim to benefit under the relevant ST-35 forms.

Analysis: The Tribunal had itself earlier directed that the verification report be furnished, but the final adverse order was passed without supplying that report to the dealer. The impugned orders therefore rested on material that had not been disclosed to the affected party, depriving it of an effective opportunity to meet the adverse material. Since the sales were otherwise found genuine and the dispute turned only on verification of the ST-35 forms, the denial of the report vitiated the proceedings. The proper course was to set aside the consequential orders and remit the matter for limited verification after supplying the report.

Conclusion: The orders could not be sustained and were set aside. The matter was remitted to the assessing authority for limited reconsideration of the claim relating to the 23 ST-35 forms after furnishing the report to the assessee.

Final Conclusion: The decision grants relief to the assessee by invalidating the adverse orders on natural justice grounds and directing a confined remand for fresh verification of the disputed forms.

Ratio Decidendi: An order based on adverse material not furnished to the affected party violates natural justice and cannot stand, warranting remand for fresh decision after disclosure of that material.

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